This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. 2021 business on the on the business & Bell, P.C., Wichita, Kansas, Bond Counsel Bond Kansas, Wichita, P.C., Bell, & through the facilities of in DTC New York, New York onor about 10, June 2021 Maga the Benefici the expected, turn, to in suchremit principal and interest to the Participants DTC (herein defined) to for subsequent disbursement INDEBTEDNESS OF THE OF THE INDEBTEDNESS BESHALL NOT OR TITUTECONS A GENERAL OBL . . Statement Official this in Series Series of the Owner the is & Co., Cede nominee, its owner of $500,000 or more in aggregate principal amount of Series a to registered payment of an interest case the or, in owner such registered to mailed Agent Paying of the draft or by check “Registrar”). and Agent” “ PAYME TO THE PLEDGED CHAR Sewer Utility (the “Utility”) on a parity of lien with the Parity Indebtedness principal and interest by pledge a of owners thereof at the office of the Treasurer of the State of Kansas, Topeka, Kansas, Kansas, Topeka, of Kansas, State of the Treasurer the of office the at thereof owners will be payable at maturity earlier or redemption upon presentation and surrender of the Series denominations of $5,000 or any integral multiple thereof “Issuer”), fullyas registered bonds have have tax minimum alternative allocable to an owner thereof) Series Series of the defined) (as herein Owners Beneficial the mean not shall and aforesaid, as & Co., Cede Series certificates representing their interests in date The e Series e Series the for depository registered owner and nominee for The Depository Trus Dated: change to *subject n the & opinion P.C., Bond of Counsel, Gilmore Bell, under existing lawand assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the “ NE T DEFINITIONS USED IN THIS OFFICIAL STATEMENT. – “APPENDIX MAKING THE TO C OFESSENTIAL DECISION. INFORMED AN INVESTMENT INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT, INCLUDING ALL APPENDICES OBTAIN ATTACHED TO INFORMATION HERETO THE HE COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. THE COVER PAGE IS NOT A SUMMARY OF THIS ISSUE. ASUMMARY CERTAIN NOT THIS PAGE INFORMATION OF PAGE FOR IS COVER REFERENCE CONTAINS QUICK HE COVER THE ONLY. W ISSUE not IN (the “Interest Payment Dates”) Payment “Interest (the a, E ña, SERIES SERIES 2021A 2021A TER PROVISION, LIMITATION OR RESTRICTION, AND THE TAXING POWER OF THE CITY IS IS CITY POWERNOT OFTHE TAXING ANDTHE OR RESTRICTION, LIMITATION PROVISION, TER

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BIDS FOR THE BIDS SERIES

BONDS t ] ] he interest onthe ENTRY ONL ENTRY day (whether or not a business day) of the calendar is exclud Interest 2021A Bond Bond ISSUER WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY O R STATUTORY OF ANYCONSTITUTIONAL, MEANING THE ISSUER WITHIN NT OF THE OF THE NT WATER AND SEWER UTILITY bonds – able s

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the to the persons who are the registered owners of the Series the Net Revenues (as defined herein) derived from the operation of the City’s Water an Water City’s of the operation the from derived herein) defined (as Revenues Net the the “ (the PRELIMINARY Series Series Y special obligations of the City, Series Series of s. Purchases the Series Series

Series Series Code Series Series . 2021 4, May 2021A CI

SERIES SERIES

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MATURITY SCHEDULE

$36,715,000* Water and Sewer Utility Revenue Bonds Series 2021A

Stated Annual CUSIP(1) Stated Annual CUSIP(1) Maturity Principal Rate of Base Maturity Principal Rate of Base (October 1) Amount* Interest Yield 967338 (October 1) Amount* Interest Yield 967338 2022 $1,565,000 2032 $1,945,000 2023 1,625,000 2033 1,985,000 2024 1,690,000 2034 2,025,000 2025 1,760,000 2035 2,070,000 2026 1,780,000 2036 2,110,000 2027 1,795,000 2037 2,155,000 2028 1,820,000 2038 2,200,000 2029 1,850,000 2039 2,255,000 2030 1,875,000 2040 2,300,000 2031 1,910,000 *subject to change

[TERM BONDS]

Stated Annual CUSIP(1) Maturity Principal Rate of Base (October 1) Amount* Interest Yield 967338

2040

(1) CUSIP data is provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a subsidiary of The McGraw-Hill Companies, Inc, and is included solely for the convenience of the Owners of the Series 2021A Bonds. Neither the Issuer nor the Original Purchaser shall be responsible for the selection or correctness of the CUSIP numbers set forth above.

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NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED BY THE ISSUER TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS WITH RESPECT TO THE SERIES 2021A BONDS OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE ISSUER.

IN CERTAIN INSTANCES, AS NOTED HEREIN, INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT HAS BEEN OBTAINED FROM HISTORICAL RECORDS AND SOURCES OTHER THAN THE ISSUER. ALTHOUGH THE ISSUER BELIEVES SUCH OUTSIDE SOURCES OF INFORMATION ARE RELIABLE, THE ISSUER DOES NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF INFORMATION CONTAINED HEREIN WHICH WAS OBTAINED FROM SOURCES OTHER THAN THE ISSUER.

THE FINANCIAL AND OTHER INFORMATION PRESENTED HEREIN IS INTENDED TO SHOW RECENT HISTORIC INFORMATION, AND IS NOT INTENDED TO INDICATE FUTURE OR CONTINUING TRENDS IN THE FINANCIAL POSITION OR OTHER AFFAIRS OF THE ISSUER. NO REPRESENTATION IS MADE THAT PAST PERFORMANCE, AS MIGHT BE SHOWN BY SUCH FINANCIAL AND OTHER INFORMATION, WILL NECESSARILY CONTINUE OR BE EXPECTED IN THE FUTURE. THE INFORMATION AND EXPRESSIONS OF OPINION IN THIS OFFICIAL STATEMENT ARE SUBJECT TO CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE MADE AFTER SUCH DELIVERY SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER SINCE THE DATE OF THIS OFFICIAL STATEMENT.

THE SERIES 2021A BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SERIES 2021A BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE SERIES 2021A BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE SERIES 2021A BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

THIS PRELIMINARY OFFICIAL STATEMENT IS DEEMED TO BE FINAL (EXCEPT FOR PERMITTED OMISSIONS) BY THE ISSUER FOR PURPOSES OF COMPLYING WITH RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION.

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.

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CITY OF WICHITA, KANSAS PRELIMINARY OFFICIAL STATEMENT Table of Contents Introduction ...... 1 General Matters ...... 1 Definitions ...... 1 Purpose ...... 1 Security ...... 1 Continuing Disclosure...... 2 Certification ...... 2 Additional Information ...... 2 The Series 2021A Bonds ...... 3 Authority for the 2021A Bonds ...... 3 Security for the 2021A Bonds ...... 3 Description of the 2021A Bonds ...... 3 Designation of Paying Agent and Bond Registrar ...... 3 Method and Place of Payment of the 2021A Bonds ...... 4 Payments Due on Saturdays, Sundays and Holidays ...... 4 Book-Entry Bonds; Securities Depository ...... 4 CITY OFFICIALS Registration, Transfer and Exchange of Series 2021A Bonds ...... 5 Mutilated, Lost, Stolen or Destroyed Series 2021A Bonds ...... 5 Nonpresentment of Series 2021A Bonds ...... 6 Mayor Redemption Provisions ...... 6 Brandon Whipple The Depository Trust Company ...... 7 The Water and Sewer Utility Projects ...... 9 Sources and Uses of Funds ...... 9 Vice Mayor Risk Factors and Investment Considerations ...... 10 Brandon Johnson (District I) Legal Matters ...... 10 Limitations on Remedies Available to Owners of Series 2021A Bonds .... 10 Special Obligations ...... 10 City Council Debt Service Source ...... 10 Becky Tuttle (District II) Bond Reserve Account ...... 11 Jared Cerullo (District III) Water Supply ...... 11 Jeff Blubaugh (District IV) State and Federal Regulations ...... 11 Taxation of Interest on the Series 2021A Bonds ...... 11 Bryan Frye (District V) Premium on Series 2021A Bonds...... 11 Cindy Claycomb (District VI) No Additional Interest or Mandatory Redemption upon Event of Taxability...... 12 Suitability of Investment ...... 12 City Manager Market for the Series 2021A Bonds ...... 12 Robert Layton Cybersecurity Risks ...... 12 Natural Disasters, Pandemics, Terrorist or Cyber Attacks ...... 12 Director of Finance Covid-19 Pandemic ...... 13 The Wichita Water and Sewer Utility ...... 13 Mark Manning History ...... 13 Management and Personnel ...... 13 Director of Law and City Attorney Description of Water Utility ...... 14 Condition of Water Utility ...... 14 Jennifer Magaña Drought Response Planning ...... 15 Cheney Reservoir Project ...... 15 The Aquifer Storage and Recovery Project ...... 15 Water Treatment Facilities ...... 16 Description of Sewer Utility ...... 17 Effluent Reuse ...... 18 Condition of Sewer Utility ...... 18 BOND COUNSEL National Pollution Discharge Elimination System Requirements ...... 18 Bond Indebtedness ...... 19 Gilmore & Bell, P.C. SRF Loan Agreement ...... 19 Wichita, Kansas Operating and Financial Data ...... 22 Utility Billing Procedures and Current Rates ...... 22 Future Capital Project Plans ...... 22 Rating ...... 23 Absence of Litigation...... 23 Legal Matters ...... 23 Approval of Series 2021A Bonds ...... 23 Tax Matters...... 23 Opinion of Bond Counsel ...... 24 Other Tax Consequences ...... 24 CUSIP Numbers ...... 25 Municipal Advisors...... 25 Underwriting ...... 25 Miscellaneous ...... 25 Approval of Preliminary Official Statement ...... 26 APPENDIX A – City of Wichita ...... A-1 APPENDIX B – Financial Information ...... B-1 APPENDIX C – Summary of Financing Documents ...... C-1 APPENDIX D - Form of Bond Counsel’s Opinions ...... D-1 APPENDIX E – List of Utility Improvements ...... E-1 APPENDIX F – Engineer’s Report and Feasibility Study ...... F-1

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PRELIMINARY OFFICIAL STATEMENT

OF THE

CITY OF WICHITA, KANSAS

RELATING TO

$36,715,000* WATER AND SEWER UTILITY REVENUE BONDS SERIES 2021A *subject to change

INTRODUCTION

General Matters

The purpose of this Official Statement is to furnish information relating to the City of Wichita, Kansas (the “Issuer” or the “City”), and the above-referenced bonds (the “Series 2021A Bonds”), which will be dated June 1, 2021 (the “Dated Date”):

The Appendices to this Official Statement are integral parts of this document, to be read in their entirety.

The Issuer is a municipal corporation duly organized and existing under the laws of the State of Kansas (the “State”). Additional information regarding the City is contained in APPENDIX A to this Official Statement.

The materials contained on the cover page, in the body and in the Appendices to this Official Statement are to be read in their entirety. Except for the information expressly attributed to other sources deemed to be reliable, all information has been compiled or provided by the City. The presentation of information herein, including tables of receipts from various taxes, is intended to show recent historic information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. No representation is made that past experience, as might be shown by such financial or other information, will necessarily continue or be repeated in the future. Bond Counsel has not assisted in the preparation nor reviewed this Official Statement, except to the extent described under the section captioned “LEGAL MATTERS,” and accordingly Bond Counsel expresses no opinion as to the accuracy or sufficiency of any other information contained herein.

Definitions

The Series 2021A Bonds will be authorized pursuant to an ordinance and resolution of the City Council of the City (the “Governing Body”), which are referred to as the “Series 2021A Bond Resolution.” Other capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in “APPENDIX C – SUMMARY OF FINANCING DOCUMENTS – THE BOND RESOLUTION - DEFINITIONS.”

Purpose

The Series 2021A Bonds are being issued pursuant to the Constitution and statutes of the State of Kansas, as amended by a Charter Ordinance of the City. The Series 2021A Bonds are being issued to permanently finance a portion of multiple improvements, extensions, enlargements, repairs, alterations and reconstructions of the various facilities of the Utility (the “Projects”), to make a deposit to the Series 2021A Bond Reserve Subaccount and to pay Costs of Issuance. See “THE WATER UTILITY AND SEWER UTILITY PROJECTS” herein for a more detailed description of the Projects. A description of the sources and uses of funds in connection with the Series 2021A Bonds are more fully described in the section of this Official Statement entitled “SOURCES AND USES.”

Security

The Series 2021A Bonds and the interest thereon will constitute special obligations of the City, payable solely from, and secured as to the payment of principal and interest by a pledge of, the net revenues of the Utility (the “Net Revenues”) as prescribed by the Act on a parity with the Parity Indebtedness. The taxing power of the City is not pledged to the payment of the Series 2021A Bonds either as to principal or interest. The Series 2021A Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction. See “THE SERIES 2021A BONDS – Security for the Series 2021A Bonds” herein for a more detailed discussion relating to security for the Series 2021A Bonds.

1

Continuing Disclosure

The Issuer has previously adopted continuing disclosure undertakings (the “Prior Undertakings”) wherein the Issuer covenanted to provide annually certain financial information and operating data of the Utility and other information necessary to comply with the provisions of Rule 15c2-12 (the “Rule”) promulgated by the Securities and Exchange Commission (the “SEC”) and to transmit the same to the Electronic Municipal Market Access system (“EMMA”) maintained by the Municipal Securities Rulemaking Board (the “MSRB”). The Issuer’s Comprehensive Annual Financial Report (the “Comprehensive Report”) contains the audited financial statements of, and statistical information regarding, the Issuer and the Utility. The Issuer’s filings for recent years pursuant to the Prior Undertakings are set forth in the table below.

Fiscal Year Filing Time Report Ending December 31 Period (Days) Filing Date 2015 180 06/24/2016 2016 180 06/30/2017* 2017 180 06/29/2018 2018 180 06/28/2019 2019 180 06/26/2020 *referenced filing occurred one day past applicable deadline

In addition to the filing dates listed above, on December 15, 2017, the Issuer filed on EMMA an Annual Operating Data and Financial Information Incorporation by Reference document providing for incorporation by reference of certain financial information and operating data contained in official statements for obligations issued during the years 2012 - 2017.

During the past five years, the Issuer has made filings of event notices on EMMA with respect to bond and note calls, defeasances, rating changes and updated statistical information omitted in certain Comprehensive Reports, however, during said time period, the Issuer may not have made timely filings of event notices on EMMA relating to all bond and note calls, defeasances or rating changes. The Issuer believes this information was disseminated or available through other sources. In particular, event notices were not timely filed on EMMA in connection with certain rating changes on various series of bonds resulting from changes in the ratings of the applicable bond insurers.

In the Series 2021A Bond Resolution the Issuer adopted a Continuing Disclosure Undertaking (the “Disclosure Undertaking”) applicable only to the Series 2021A Bonds. In the Disclosure Undertaking, the Issuer has covenanted with the Series 2021A Original Purchaser (as hereinafter defined) and the Beneficial Owners of the Series 2021A Bonds to provide annually certain financial information and operating data of the Utility and other information necessary to comply with the provisions of Rule, as amended and to transmit the same to EMMA. This covenant is for the benefit of and is enforceable by the Beneficial Owners of the Series 2021A Bonds. For more information regarding the Disclosure Undertaking, see “APPENDIX C – SUMMARY OF FINANCING DOCUMENTS – THE DISCLOSURE UNDERTAKING.”

Certification

The Issuer has authorized the distribution of this Official Statement for use in connection with the initial sale of the Series 2021A Bonds. This Official Statement does not constitute a contract between the Issuer or the Original Purchasers and any one or more of the purchasers, Owners or Beneficial Owners of the Series 2021A Bonds. As of the date of the delivery of the Series 2021A Bonds, the Original Purchaser will be furnished with a certificate signed by an officer of the Issuer stating that, to the best of such officer’s knowledge, in the Official Statement, the Issuer has not made an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made herein, in light of the circumstances under which they were made, not misleading.

Additional Information

Additional information regarding the Series 2021A Bonds may be obtained from the Department of Finance, 12th Floor, City Hall, 455 North Main, Wichita, Kansas 67202-1679, or by contacting:

Ms. Cheryl Busada Debt Coordinator Phone: (316) 268-4143 Fax: (316) 219-6216 Email: [email protected]

Additional copies of this Official Statement may be obtained at www.onlinemunis.com.

2

THE SERIES 2021A BONDS

Authority for the Series 2021A Bonds

The Series 2021A Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas including K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-620 et seq., and K.S.A. 10-1201 et seq., as amended by Charter Ordinance No. 211 of the City (collectively the “Act”) and the Series 2021A Bond Resolution.

Security for the Series 2021A Bonds

The Series 2021A Bonds shall be special obligations of the Issuer payable solely from, and secured as to the payment of principal and interest by a pledge of, the Net Revenues derived by the Issuer from the operation of the Utility. THE SERIES 2021A BONDS SHALL NOT BE OR CONSTITUTE A GENERAL OBLIGATION OF THE CITY, NOR SHALL THEY CONSTITUTE AN INDEBTEDNESS OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER PROVISION, LIMITATION OR RESTRICTION, AND THE TAXING POWER OF THE CITY IS NOT PLEDGED TO THE PAYMENT OF THE SERIES 2021A BONDS, EITHER AS TO PRINCIPAL OR INTEREST. The Series 2021A Bonds shall stand on a parity and be equally and ratably secured with respect to the payment of principal and interest from the Net Revenues and in all other respects with any Parity Indebtedness. Reference is made to “APPENDIX C – SUMMARY OF FINANCING DOCUMENTS – THE SERIES 2021A BOND RESOLUTION – DEFINITIONS” for a listing of the Parity Indebtedness currently outstanding.

The City, in accordance with and subject to applicable legal requirements, will fix, establish, maintain and collect such rates and charges for the use and services furnished by or through the Utility as will produce Gross Revenues sufficient to: (a) pay the Current Expenses of the Utility; (b) pay the Debt Service Requirements on Utility Indebtedness as and when the same become due at the Maturity thereof or on any Interest Payment Date; (c) enable the City to have in each Fiscal Year, Net Revenues not less than 120% of the Debt Service Requirements for such Fiscal Year on all Parity Indebtedness at the time Outstanding, 100% of the Debt Service Requirements for such Fiscal Year on any Subordinate Lien Indebtedness and Utility General Obligation Indebtedness; and (d) provide reasonable and adequate reserves for the payment of the Utility Indebtedness and the interest thereon and for the protection and benefit of the Utility as provided in the Series 2021A Bond Resolution.

Series 2021A Bond Resolution. Reference is made to the entire text of the Series 2021A Bond Resolution for a full and complete description of the covenants of the Issuer relating to the security for the Series 2021A Bonds. A summary of the Series 2021A Bond Resolution is contained in “APPENDIX C – SUMMARY OF FINANCING DOCUMENTS – THE BOND RESOLUTION.”

Description of the Series 2021A Bonds

The Series 2021A Bonds shall consist of fully registered book-entry-only bonds in an Authorized Denomination and shall be numbered in such manner as the Bond Registrar shall determine. All of the Series 2021A Bonds shall be dated as of the Dated Date, become due in the amounts on the Stated Maturities, subject to redemption and payment prior to their Stated Maturities as hereinafter set forth, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid, on the Interest Payment Dates in the manner hereinafter set forth.

Designation of Paying Agent and Bond Registrar

The Issuer will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Series 2021A Bond Resolution. The Issuer reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the Issuer shall at all times meet the requirements of Kansas law.

The Treasurer of the State of Kansas, Topeka, Kansas (the “Bond Registrar” and “Paying Agent”) has been designated by the Issuer as paying agent for the payment of principal of and interest on the Series 2021A Bonds and bond registrar with respect to the registration, transfer and exchange of Series 2021A Bonds.

3

Method and Place of Payment of the Series 2021A Bonds

The principal of, or Redemption Price, and interest on the Series 2021A Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of the Series 2021A Bond shall be paid at Maturity to the Person in whose name such Series 2021A Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Series 2021A Bond at the principal office of the Paying Agent.

The interest payable on the Series 2021A Bond on any Interest Payment Date shall be paid to the Owner of such Series 2021A Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Series 2021A Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed.

Notwithstanding the foregoing, any Defaulted Interest with respect to any Series 2021A Bond shall cease to be payable to the Owner of such Series 2021A Bond on the relevant Record Date and shall be payable to the Owner in whose name such Series 2021A Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The Issuer shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on the Series 2021A Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall notify the Issuer of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Series 2021A Bond entitled to such notice not less than 10 days prior to such Special Record Date.

SO LONG AS CEDE & CO., REMAINS THE REGISTERED OWNER OF THE BONDS, THE PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See “THE SERIES 2021A BONDS – Book- Entry Bonds; Securities Depository.”

Payments Due on Saturdays, Sundays and Holidays

In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date.

Book-Entry Bonds; Securities Depository

The Series 2021A Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Series 2021A Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Series 2021A Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Series 2021A Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs.

The Issuer may decide, subject to the requirements of the Operational Arrangements of DTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository):

(a) If the Issuer determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Series 2021A Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Series 2021A Bonds; or

(b) if the Bond Registrar receives written notice from Participants having interest in not less than 50% of the Series 2021A Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the 4

Securities Depository), that the continuation of a book-entry system to the exclusion of any Series 2021A Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Series 2021A Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(1) or (a)(2) of this paragraph, the Issuer, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers.

In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Series 2021A Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Issuer, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Series 2021A Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the Issuer.

In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Series 2021A Bond or Series 2021A Bonds for cancellation shall cause the delivery of the Series 2021A Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Series 2021A Bond Resolution.

Registration, Transfer and Exchange of Series 2021A Bonds

As long as any of the Series 2021A Bonds remain Outstanding, the Series 2021A Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Series 2021A Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Series 2021A Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Series 2021A Bond for a new Series 2021A Bond or Series 2021A Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Series 2021A Bond that was presented for transfer or exchange. Series 2021A Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent.

In all cases in which the privilege of transferring or exchanging Series 2021A Bonds is exercised, the Bond Registrar shall authenticate and deliver Series 2021A Bonds in accordance with the provisions of the Series 2021A Bond Resolution. The Issuer shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Series 2021A Bonds. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Series 2021A Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure.

The Issuer and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Series 2021A Bond that has been called for redemption after notice of such redemption has been mailed by the Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Series 2021A Bond during a period beginning at the opening of business on the day after receiving written notice from the Issuer of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest.

Mutilated, Lost, Stolen or Destroyed Series 2021A Bonds

If (a) any mutilated Series 2021A Bond is surrendered to the Bond Registrar or the Bond Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Series 2021A Bond, and (b) there is delivered to the Issuer and the Bond Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the Bond Registrar that such Series 2021A Bond has been acquired by a bona fide purchaser, the Issuer shall execute and, upon the Issuer's request, the Bond Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, 5

destroyed, lost or stolen Series 2021A Bond, a new Series 2021A Bond of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Series 2021A Bond has become or is about to become due and payable, the Issuer, in its discretion, may pay such Series 2021A Bond instead of issuing a new Series 2021A Bond. Upon the issuance of any new Series 2021A Bond, the Issuer may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith.

Nonpresentment of Series 2021A Bonds

If any Series 2021A Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Series 2021A Bond have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Series 2021A Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Series 2021A Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Series 2021A Bond Resolution or on, or with respect to, said Series 2021A Bond. If any Series 2021A Bond is not presented for payment within four (4) years following the date when such Series 2021A Bond becomes due at Maturity, the Paying Agent shall repay to the Issuer the funds theretofore held by it for payment of such Series 2021A Bond, and such Series 2021A Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money.

Redemption Provisions

Optional Redemption. At the option of the City, the Series 2021A Bonds maturing in the years 2030 and thereafter will be subject to redemption and payment prior to maturity on October 1, 2029, and thereafter, as a whole or in part (selection of the amount of Series 2021A Bonds to be redeemed to be determined by the City in such equitable manner as it may determine) at any time, at a redemption price of 100% (expressed as percentage of the principal amount), plus accrued interest thereon to the date of redemption.

[Mandatory Redemption.

(a) The Series 2021A [____] Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The payments which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such Series 2021A [____] Term Bonds:

Principal Amount Year $ * ______*Final Maturity

(b) The Series 2021A [____] Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The payments which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such Series 2021A [____] Term Bonds:

Principal Amount Year $ * ______*Final Maturity

Selection of Series 2021A Bonds to be Redeemed. Series 2021A Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Series 2021A Bonds are to be redeemed and paid prior to their Stated Maturity, such Series 2021A Bonds shall be redeemed in such manner as the Issuer shall determine, Series 2021A Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denominations in such equitable manner as 6

the Bond Registrar may determine. In the case of a partial redemption of Series 2021A Bonds by lot when Series 2021A Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Series 2021A Bond of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Series 2021A Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Series 2021A Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Series 2021A Bond or Series 2021A Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Series 2021A Bond. If the Owner of any such Series 2021A Bond fails to present such Series 2021A Bond to the Paying Agent for payment and exchange as aforesaid, such Series 2021A Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only).

Notice and Effect of Call for Redemption. Unless waived by any Owner of Series 2021A Bonds to be redeemed, if the Issuer shall call any Series 2021A Bonds for redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its intention to call and pay said Series 2021A Bonds to the Bond Registrar and the Original Purchaser. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the Owners of said Series 2021A Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date.

All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Series 2021A Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Series 2021A Bonds, the respective principal amounts) of the Series 2021A Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Series 2021A Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Series 2021A Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption.

Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Series 2021A Bonds or portions of Series 2021A Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Series 2021A Bonds or portions of Series 2021A Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the Issuer defaults in the payment of the Redemption Price) such Series 2021A Bonds or portion of Series 2021A Bonds shall cease to bear interest.

For so long as the Securities Depository is effecting book-entry transfers of the Series 2021A Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Series 2021A Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Series 2021A Bond so affected, shall not affect the validity of the redemption of such Series 2021A Bond.

In addition to the foregoing notice, the Issuer shall provide such notices of redemption as are required by the Disclosure Undertaking. The Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Series 2021A Bond.

THE DEPOSITORY TRUST COMPANY

1. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Series 2021A Bonds. The Series 2021A Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered certificate will be issued for each scheduled maturity of the Series 2021A Bonds and will be deposited with DTC.

2. DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset 7

servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

3. Purchases of Series 2021A Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2021A Bonds on DTC’s records. The ownership interest of each actual purchaser of the Series 2021A Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2021A Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2021A Bonds, except in the event that use of the book-entry system for the Series 2021A Bonds is discontinued.

4. To facilitate subsequent transfers, all Series 2021A Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2021A Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2021A Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Series 2021A Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

6. Redemption notices shall be sent to DTC. If less than all of the Series 2021A Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2021A Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Series 2021A Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Series 2021A Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. A Beneficial Owner shall give notice to elect to have its Series 2021A Bonds purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Series 2021A Bonds by causing the Direct Participant to transfer the Participant’s interest in the Series 2021A Bonds, on DTC’s records, to the Paying Agent. The requirement for physical delivery of the Series 2021A Bonds in connection with an optional tender or a mandatory purchase will be deemed 8

satisfied when the ownership rights in the Series 2021A Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Series 2021A Bonds to the Paying Agent’s DTC account.

10. DTC may discontinue providing its services as depository with respect to the Series 2021A Bonds at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2021A Bond certificates are required to be printed and delivered.

11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Series 2021A Bond certificates will be printed and delivered to DTC.

12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof.

THE ISSUER WILL HAVE NO RESPONSIBILITY OR OBLIGATION TO THE DTC PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO: THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT; THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OF ANY AMOUNT IN RESPECT OF THE PRINCIPAL, REDEMPTION PRICE OF OR INTEREST ON THE BONDS; THE TRANSMITTAL TO BENEFICIAL OWNERS OR DTC PARTICIPANTS OF ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO OWNERS OF THE BONDS UNDER THE BOND RESOLUTION; THE SELECTION BY DTC OR ANY DTC PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS; OR ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS OWNER OF THE BONDS.

THE WATER AND SEWER UTILITY PROJECTS

Proceeds of the Series 2021A Bonds will permanently finance a portion of multiple improvements, extensions, enlargements, repairs, alterations and reconstructions of the various facilities of the Utility (the “Projects”). Reference is made to the Description of Water Utility and Sewer Utility Projects included as Appendix E to this Official Statement and the Engineer’s Report and Feasibility Study included as Appendix F to this Official Statement for more complete descriptions of the Projects. Substitute Projects may be added to or substituted for the Projects under the terms of the Series 2021A Bond Resolution.

SOURCES AND USES OF FUNDS

The following table summarizes the sources and uses of funds associated with the issuance of the Series 2021A Bonds:

Sources of Funds: Principal Amount $36,715,000* Accrued Interest [______] [Original Issue Premium] [______] [Original Issue Discount] [______]

Total $[______]

Uses of Funds: Deposit to Sewer Utility Projects Fund $[______] Deposit to Water Utility Projects Fund [______] Deposit to Principal and Interest Subaccount – Accrued Interest [______] Deposit to Bond Reserve Subaccount [______] Deposit to Costs of Issuance Account [______] Original Purchaser’s Compensation [______]

Total $[______]

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RISK FACTORS AND INVESTMENT CONSIDERATIONS

A PROSPECTIVE PURCHASER OF THE SERIES 2021A BONDS DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SERIES 2021A BONDS WHICH MUST BE RECOGNIZED. THE FOLLOWING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE SERIES 2021A BONDS. PROSPECTIVE PURCHASERS OF THE BONDS SHOULD ANALYZE CAREFULLY THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT AND ADDITIONAL INFORMATION IN THE FORM OF THE COMPLETE DOCUMENTS SUMMARIZED HEREIN, COPIES OF WHICH ARE AVAILABLE AND MAY BE OBTAINED FROM THE ISSUER OR THE ORIGINAL PURCHASERS OF THE SERIES 2021A BONDS.

Legal Matters

Various state and federal laws, regulations and constitutional provisions apply to the obligations created by the Series 2021A Bonds. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, provisions and regulations which would have a material effect, either directly or indirectly, on the City or the Utility.

Limitations on Remedies Available to Owners of Series 2021A Bonds

The enforceability of the rights and remedies of the owners of Series 2021A Bonds, and the obligations incurred by the Issuer in issuing the Series 2021A Bonds, are subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the United States Constitution; and the reasonable and necessary exercise, in certain unusual situations, of the police power inherent in the State of Kansas and its governmental subdivisions in the interest of serving a legitimate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the Series 2021A Bonds to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights.

Special Obligations

The Series 2021A Bonds are special, limited obligations of the Issuer. Neither the Series 2021A Bonds nor the interest thereon constitute a general obligation or indebtedness of, nor is the payment thereof guaranteed by, the City, or any governmental subdivision, agency or instrumentality. The Series 2021A Bonds are not payable in any manner from tax revenues.

Debt Service Source

The Series 2021A Bonds are payable solely from the Net Revenues. While the future ability of the Issuer to meet its obligations under the Series 2021A Bond Resolution is based upon assumptions and business judgments which the Issuer believes are reasonable and appropriate, they are subject to conditions which may change in the future to an extent that presently cannot be determined. The COVID-19 pandemic, discussed further herein, may adversely impact the Net Revenues in terms of payment delinquencies and other presently unquantifiable economic results. Thus, no assurance can be given that revenues will be realized by the Issuer in amounts sufficient to pay the principal of and interest on the Series 2021A Bonds as they become due.

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Bond Reserve Account

Pursuant to the Series 2021A Bond Resolution, an amount equal to the greater of the interest to be paid on the Series 2021A Bonds during the next Fiscal Year or the maximum interest to be paid on the Series 2021A Bonds during any subsequent Fiscal Year (the “Series 2021A Bond Reserve Requirement”) is required to be deposited in the Bond Reserve Subaccount for the Series 2021A Bonds (the “Bond Reserve Subaccount”) of the Bond Reserve Account. The Series 2021A Bond Reserve Requirement may be satisfied by cash or Authorized Investments. The City will fund the Series 2021A Bond Reserve Subaccount with proceeds of the Series 2021A Bonds in an amount equal to the Series 2021A Bond Reserve Requirement. Amounts held in the Series 2021A Bond Reserve Subaccount may be applied by the City to prevent default in payment of the principal of and interest on the Series 2021A Bonds in accordance with the Series 2021A Bond Resolution in the event funds on hand in the Principal and Interest Subaccount for the Series 2021A Bonds are insufficient to provide funds for payments due for the Series 2021A Bonds on any Payment Date. In the event that the Series 2021A Bond Reserve Subaccount contains Authorized Investments and the City is required to sell such Authorized Investments for an authorized purpose, the price realized upon such sale may not equal the Series 2021A Bond Reserve Requirement.

In the event of a default by the City under the Series 2021A Bond Resolution, moneys deposited in the Series 2021A Bond Reserve Subaccount may, under certain circumstances and, ordinarily under the supervision of and under order of the Courts, be applied for purposes other than payment of the Series 2021A Bonds. Such purposes may include preservation of and security for the Utility, maintenance of insurance, payment of expenses incurred in attempting to operate the Utility and payment of other similar costs.

Water Supply

The ability of the Utility to achieve Net Revenues to meet its Debt Service Requirements is contingent on a variety of factors, including the availability of an adequate supply of water. The Utility obtains raw water from several sources. Reference is made to the section of this Official Statement entitled “THE WATER AND SEWER UTILITY” for a complete description of the water supply. Conditions beyond the control of the City or the Utility may cause interruption of this water supply, including contamination of such supply, failure of electricity necessary to operate pumping stations and destruction of supply pipelines. If such events occur, the operations of the Utility will be impaired.

State and Federal Regulation

The rates, fees and charges for water and sewer service provided by the Utility as currently constructed and operated are exempt from rate regulation by any Federal or State agency, including the Kansas Corporation Commission. The precise nature and extent of future governmental regulation and the resulting impact of such regulation on the operation and profitability of the Utility cannot now be determined. The City has covenanted in the Series 2021A Bond Resolution to comply with all such governmental regulations.

Taxation of Interest on the Series 2021A Bonds

An opinion of Bond Counsel will be obtained to the effect that interest earned on the Series 2021A Bonds is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Series 2021A Bonds includable in gross income for federal income tax purposes.

The Issuer has covenanted in the Series 2021A Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Series 2021A Bonds to comply with the provisions of the Code, including those which require the Issuer to take or omit to take certain actions after the issuance of the Series 2021A Bonds. Because the existence and continuation of the excludability of the interest on the Series 2021A Bonds depends upon events occurring after the date of issuance of the Series 2021A Bonds, the opinion of Bond Counsel described under “TAX MATTERS” assumes the compliance by the Issuer with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Series 2021A Bonds in the event of noncompliance with such provisions. The failure of the Issuer to comply with the provisions described above may cause the interest on the Series 2021A Bonds to become includable in gross income as of the date of issuance.

Premium on Series 2021A Bonds

[The initial offering prices of certain maturities of the Series 2021A Bonds that are subject to optional redemption are in excess of the respective principal amounts thereof. ]Any person who purchases a Series 2021A Bond in excess of its principal amount, whether during the initial offering or in a secondary market transaction, should consider that the Series 2021A Bonds are subject to redemption at par under the various circumstances described under “THE BONDS – Redemption Provisions.” 11

No Additional Interest or Mandatory Redemption upon Event of Taxability

An investment in the Series 2021A Bonds involves a certain degree of risk. The interest rate borne by the Series 2021A Bonds (as compared to prevailing interest rates on more secure tax exempt bonds such as those which constitute general obligations of fiscally sound municipalities) is intended to compensate the investor for assuming this element of risk. Furthermore, the Series 2021A Bond Resolution does not provide for the payment of additional interest or penalty on the Series 2021A Bonds or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, there is no provision for the payment of any additional interest or penalty on the Series 2021A Bonds if the interest thereon becomes subject to income taxation by the State.

Suitability of Investment

The tax exempt feature of the Series 2021A Bonds is more valuable to high tax bracket investors than to investors who are in low tax brackets, and so the value of the interest compensation to any particular investor will vary with individual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Series 2021A Bonds are an appropriate investment.

Market for the Series 2021A Bonds

Rating. The Series 2021A Bonds have been assigned the financial ratings set forth in the section hereof entitled “RATING.” There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect on the market price of the Series 2021A Bonds.

Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Series 2021A Bonds. Prices of Series 2021A Bonds traded in the secondary market, though, are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend indefinitely secondary market trading in the Series 2021A Bonds as a result of financial condition or market position of broker-dealers, prevailing market conditions, lack of adequate current financial information about the City or the Utility, or a material adverse change in the financial condition of the City or the Utility, whether or not the Series 2021A Bonds are in default as to principal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices.

Cybersecurity Risks

Security breaches, including electronic break-ins, computer viruses, attacks by hackers and similar breaches could create disruptions or shutdowns of the Issuer and the services it provides, or the unauthorized disclosure of confidential personal, health-related, credit and other information. If a security breach occurs, the Issuer may incur significant costs to remediate possible injury to the affected persons, and the Issuer may be subject to sanctions and civil penalties. Any failure to maintain proper functionality and security of information systems could interrupt the Issuer’s operations, delay receipt of revenues, damage its reputation, subject it to liability claims or regulatory penalties and could have a material adverse effect on its operations, financial condition and results of operations.

Natural Disasters, Pandemics, Terrorist or Cyber Attacks

The occurrence of a terrorist attack or cyber security breach in the Issuer, natural disasters, such as fires, tornados, earthquakes, floods or droughts, or pandemics could damage the Issuer and its systems and infrastructure, interrupt supply chains and services, or otherwise impair operations of the Issuer.

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COVID-19 Pandemic

On March 11, 2020, the World Health Organization proclaimed the Coronavirus (COVID-19) to be a pandemic. In an effort to lessen the risk of transmission of COVID-19, the United States government, state and local governments and private industries have taken measures to limit social interactions in an effort to limit the spread of COVID-19, affecting business activities and impacting global, state and local commerce and financial markets. As such governmental authorities continue efforts to contain and limit the spread COVID-19 disease, future revenue collections, including Utility revenue collections, may deviate from historical or anticipated levels.

Commercial volumes were negatively impacted in 2020, finishing the year with a 2% overall decrease. Residential volumes increased substantially, largely due to 2020 being a relatively warm and dry year, driving up seasonal water consumption. Despite the impacts of the pandemic, year-over-year revenue from 2019 to 2020 increased approximately 30% in water and 16% in sewer. Some of this can be attributed to the rate increases that took effect January 1, 2020.

Shut-offs for non-payment were suspended through most of 2020 and resumed in April 2021. The Utility experienced a similar suspension of shut-offs back in 2017 while converting to a new billing system. During the 2017 suspension, delinquent accounts eligible for shut-off peaked at over 11,000. By comparison, the peak during the recent moratorium was just over 9,000. Proactive collection efforts such as calling delinquent customers to offer payment arrangements or connection to local resources were implemented in 2020 to help avoid a potential backlog of accounts eligible for disconnection when shutoffs resumed. Normal collection activities such as state tax setoffs and referrals to third-party collection agencies have continued without interruption. At the onset of the pandemic in March 2020, 4.8% of all accounts were in delinquent status. As of the end of March 2021, 6.9% of all accounts were in delinquent status.

The Utility continues to closely monitor the impact of the COVID-19 pandemic on Utility revenues. A balance of customer affordability and responsible financial management will continue to guide decision-makers as the City manages the impact of the COVID-19 pandemic.

THE WICHITA WATER AND SEWER UTILITY

History

Water. 1882, the City granted a franchise for the construction and operation of a central water system. This franchise was operated by a subsidiary of the American Waterworks Company until 1940 when the City assumed responsibility for the supply, transmission, and treatment of water in order to assure an excellent quality and abundant quantity of water to the residents of the City. In 1957, the City purchased the facilities owned by the American Waterworks Company with the proceeds of $41,825,000 Waterworks Revenue Bonds.

Sewer. The first sewer system was constructed in the City in 1889, with primary treatment facilities constructed in 1932 and secondary treatment facilities in 1959.

Combined Utility. In 1987, the governing body of the City adopted an ordinance providing for the combining of the Water Utility and Sewer Utility into the Wichita Water and Sewer Utility.

Management and Personnel

The Utility is owned and operated by the City through its Public Works & Utilities Department. The City and its Departments are managed under the Council-Manager form of government, in which the City Manager serves as the chief administrative officer and appoints qualified professional staff to operate the various Departments. The following individuals are the key senior City personnel with respect to the operation of the Utility:

ROBERT L. LAYTON became Wichita’s City Manager on February 2, 2009. He reports to a 7- member City Council and oversees 3,100 employees, a $624 million annual budget and a $2.5 billion Capital Improvement Program (CIP). Mr. Layton has been involved in local government for more than 30 years. He served as City Manager from 1984 to 2008 for Urbandale, Iowa, where he focused on planned growth, quality service delivery and sound fiscal condition. Before going to Urbandale, he was an assistant to the City Manager in Des Moines, Iowa from 1980 to 1984; prior to that he was a budget analyst and public management intern for Kansas City, MO. Mr. Layton earned a graduate degree in public administration from Syracuse University and he earned a bachelor’s degree in public administration from Drake University. He is a member of the International City/County Management Association, a former president of the Iowa City/County Management Association and a former executive board member of the Iowa League of Cities. 13

ALAN KING was named Director of Public Works & Utilities for the City of Wichita on August 1, 2011. Mr. King’s local government career has spanned more than 30 years. He served as the Public Works Director for the city and county of Broomfield, Colorado from January 2008 to July 2011. Before going to Broomfield, Colorado, he was the Assistant Utilities Director in Bellevue, Washington from October 2001 to January 2008. Mr. King obtained his bachelor’s degree in business administration from Seattle International University/National University in 1988.

MARK L. MANNING was appointed Director of Finance in December 2020. Mr. Manning has been involved in government finance for over 30 years. He worked in State government for five years, serving as a Senior Budget Analyst in the Division of the Budget and as the Fiscal Officer for the Kansas Highway Patrol. In 1995, he joined the City of Wichita Department of Finance. In 2006, he was named the Budget and Research Director for the City of Wichita. He was appointed to the position of City Treasurer in 2017. After the planned retirement of former Director of Finance Shawn Henning, he served as interim Director of Finance. After a nationwide search, Mark was appointed as Director of Finance in 2020. Mark earned a Masters of Business Administration degree from Drake University in 1989. Previously, he earned a bachelor’s degree in accounting and finance from Wichita State University in 1988. He serves on the Joint Investment Committee for the Wichita Retirement System, as well as on several local boards.

Description of Water Utility

Wichita, many surrounding suburban areas, eight small incorporated communities, a number of major industries, a United States Air Force Base, and three Rural Water Districts are currently served by Wichita’s water system.

The Utility’s sources of water supply include local groundwater allocations of 17,561 acre-feet per year from the Arkansas River alluvium aquifer, groundwater allocations of 40,000 acre-feet per year from the Equus Beds aquifer, located approximately 25 miles northwest of the City, and 52,640 more acre-feet per year from Cheney Reservoir, located 25 miles west of Wichita. Estimated supply capacity is 180 million gallons per day (MGD) from the following: local wells- 30 MGD, Equus Beds-70 MGD, and Cheney Reservoir-80 MGD. Additional water is available through an accruing aquifer storage and recovery recharge credit which varies yearly and is currently 3,954 acre-feet. All water rights are provided by the State of Kansas through its Board of Agriculture, Division of Water Resources. The current Water Treatment Plant capacity is 160 MGD and is currently capable of meeting demand. As further discussed below, the City has begun design and construction of a new Water Treatment Plant (the “Northwest Water Facility” or “NWWF”).

Five high service pumps are located at the Cheney Reservoir Pump Station and Ozone Pretreatment facilities to provide treatment of water for taste and odor control. The supply system includes 18 miles of gathering lines in the well field and 46 miles of 36-inch, 42-inch, 48-inch, and 66-inch transmission mains from the well field to the water treatment plant. A 48-inch cross tie main connecting the major 48-inch and 66-inch well field transmission mains was completed in 1991 to provide additional system reliability and bolster future collection capabilities as the number of well sites grow to produce additional water when needed by the City in the future. The system also includes 21 miles of 60-inch transmission main from Cheney Reservoir Pump Station to the treatment works. In 2004, an additional 66-inch transmission main (22,670 feet) was completed parallel to the existing 66-inch line, to provide redundancy. Total treated water storage, including at the water treatment plant, is 50.1 million gallons. Eight high service pumps are located in the Robert H. Hess Pumping Station, placed in service in 1974. A project to replace seven of the original pumps was completed in 1998, which increased the capacity to 236 MGD, with a firm capacity of approximately 200 MGD. In 2009, the fixed speed drives were replaced with variable speed drives so all pumps could be run as variable speed, increasing efficiency of the system. The distribution system includes over 2,400 miles of lined and unlined cast and ductile iron pipe, cement-lined cast iron pipe, prestressed concrete pipe, asbestos-cement pipe, and polyvinyl chloride pipe. Mains range in size from a limited number of 2-inch to 48- inch mains. The general system minimum grid size is 8-inch diameter.

Condition of Water Utility

Due to the rapid growth of the Utility's service area in the last four decades, the average age of the various components of the Water Utility is much less than in many metropolitan areas the size of Wichita. None of the water treatment or source of supply facilities existed prior to 1940. The original wells in the Equus Beds, the gathering lines for these wells, and 25 miles of 48-inch and 42-inch transmission lines were constructed in 1940. Ten additional wells and associated gathering lines were added to the Equus Beds well field in 1946, and 20 new wells and appurtenances were constructed in 1957. The 66-inch line from the well field plus a 42-inch connecting line to the existing well field transmission lines were also constructed in 1957. The original portion of the water treatment plant with a 32 MGD well water capacity was constructed in 1940. Plant additions increasing the capacity to 48 MGD, 120 MGD and 135 MGD were constructed in 1946,

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1956 and 1991, respectively, and with the completion of construction in 1995, the plant’s capacity reached 160 MGD. When completed, the Northwest Water Facility’s capacity will be approximately 120 MGD.

The cost of providing service to unserved areas is paid primarily by special assessments charged against the properties in the benefit area. The average physical age of the distribution system is estimated to be approximately 25 years. All units of the Utility are in well-maintained condition, and the Department has received national recognition for its effective maintenance programs. The Department tracks its performance toward meeting maintenance targets for all valves and hydrants. Additionally, major water well, mains, valves, services and metering rehabilitation and replacement programs have been ongoing for the last three to five years to meet extraordinary drought demands, maintain system reliability and ensure accurate billings. The City’s Water and Sewer Master Plans, which guide staff in determining necessary improvements, were last updated in early 2017. The 2018 Operations and Conditions Report found both utility systems to be in “generally good condition.” Work on a 2021 Operations and Conditions Report is currently underway and is expected to be completed in the fall of 2021.

A Cost of Services Analysis (COSA) was completed in 2015, along with an update of the 10-year annual rate planning model, to determine potential rate increases in the future in order to fully fund the existing capital improvement program. Wichita’s customer growth is currently at a rate of 0.66% per year. A Request for Proposals was published in March 2021 for a consulting firm to complete an updated COSA. The study is expected to be substantially complete by the end of 2021. Any recommendations resulting from the findings of the COSA will be considered in 2022.

The City launched a Utilities Optimization Program (UOP) in late 2015. The first phase laid the foundation for development of a formal asset management program and optimization of all aspects of the water and sewer utilities. Phase 2, the implementation phase, began in 2018 and will continue through 2023. The second phase is led by a dedicated team of City staff and augmented with consultant expertise where needed. Efforts are focused on optimization of operations and maintenance practices and billing improvements. Benefits have included significant reduction of energy costs, improvement of preventative maintenance practices, and identification of new revenue. Development of standard operating procedures and a better-managed work order system are providing long-term benefits by extending asset life. The second major focus of the team is optimization of the Capital Improvement Program to ensure the optimum project delivery method is used for each project, and that each project is timed appropriately in regard to risk mitigation and financial responsibility.

Drought Response Planning

In order to increase protection from future droughts, the Utility developed a drought response plan which was approved in October 2013. The plan established four drought response stages based on the level of water in Cheney Reservoir that provides 60 percent of the Utility’s water supply. Response measures to the various stages include voluntary conservation, restricting outside water usage and/or a reduction of customers’ base usage.

Along with the drought response plan, the Utility continues to evaluate new water supply options to ensure an adequate long-term supply for its customers. Water supply options are being evaluated on three criteria: meeting long- term water needs, minimizing costs, and achieving reasonable conservation goals. In addition, the City is pursuing water reuse options to reduce long-term water demand. A phased-approach Public Water Supply Plan was developed in late 2015 to further enhance the water supplies serving the Utility. Funding for implementation of the plan was approved by the City Council in November 2017. The cost is currently estimated at just under $40 million for all phases.

Cheney Reservoir Project

Cheney Reservoir was constructed under a contractual agreement between the City and the United States Department of the Interior, Bureau of Reclamation. Water storage capacity of the reservoir below the top of the flood control pool is 247,931 acre-feet, with the upper 80,857 acre-feet allocated to flood control, the next 151,788 acre-feet allocated to the City water supply, and the next 15,286 acre-feet for fish and wildlife conservation. A drainage area of 901 square miles serves the Reservoir. Cheney Reservoir and other sources of supply provide a total water supply capability to the City that is adequate to meet the projected annual demand.

The Aquifer Storage and Recovery Project

The Aquifer Storage and Recovery (ASR) Project involves pumping water out of the Little Arkansas River following periods of heavy rainfall, and treating it to drinking-water quality. The water can be stored in the aquifer, an underground layer of sand and gravel that can hold water until it is needed, or used to augment the other sources of water. The current scope of the project is capable of producing up to 30 MGD of water from the Little Arkansas River. In 2019, the aquifer was near-full in the area of Wichita’s wells, which prevented recharge operations. When the aquifer is full, water recovered from the river may be utilized to reduce use of other resources, but no recharge credits are accrued. The City has

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engaged the Division of Water Resources to pursue a Permit change that would allow credits for water not pumped from the aquifer as a result of ASR recovery of intermittent surface water supply from the Little Arkansas River.

The Equus Beds aquifer covers portions of Sedgwick, Harvey, McPherson, and Reno counties with an area of approximately 900,000 acres. The ASR project encompasses approximately 55 square miles and extends northwest of Wichita across parts of Harvey and Sedgwick counties, mostly between the towns of Bentley and Halstead. The ASR project, coupled with greater use of Cheney Reservoir, the City’s existing surface water supply, will help Wichita provide water in the coming years.

Water Treatment Facilities

The Water Treatment Plant (WTP) is designed and operated as three parallel units, each providing aeration, softening, coagulation, sedimentation, recarbonation, filtration, and disinfection. The East Plant portion, constructed in 1940, can treat up to 30 MGD. The Central Plant portion, originally constructed in 1954, consists of two trains, both of which can treat up to 65 MGD for a total capacity to 160 MGD. The City has undertaken all necessary procedures to comply with all aspects of Federal Safe Drinking Water Act regulations and has not experienced any widespread water service interruptions. The WTP is staffed by certified operators 24 hours per day, year-round.

An assessment was completed in 2017 on asset conditions at the WTP. The condition assessment was conducted as part of the first phase of a comprehensive optimization study. It found that nearly all of the assets at the WTP were in either poor or very poor condition. Due to the advanced age and deteriorated condition of these assets, there are higher than normal risks of unexpected equipment and process downtimes. Some of these assets – including the chemical feed systems, filters, underdrains, and roof – have been or are in the process of being replaced, which will provide some level of improvement in the overall condition of the plant.

Relatedly, the WTP is the single source of treated drinking water for the utility’s customer base; there is no other treatment plant available to provide potable water deliveries. There are redundancies within the plant and associated pumping, so unexpected asset downtimes can generally be accommodated by backup units (including power supply, filter capacity, pumps, and others) and a comprehensive inventory of replacement parts.

However, the WTP’s poor condition and its status as the only source of treatment for drinking water combine to present a continuing risk factor pending plant replacement. A series of cascading and catastrophic failures at the plant remains a possibility, and grows more likely the longer it takes for a replacement plant to be constructed. The City cannot rule out the possibility of a plant shutdown to address operational or equipment failures, and in the event such a shutdown extended longer than the period covered by the City’s supply of treated water on hand (normally approximately 40MG), City water utility revenues would be adversely impacted.

Construction of the Northwest Water Facility, a replacement water treatment facility, is currently underway. When completed, the Northwest Water Facility will provide 120 MGD of capacity that can meet all demands for the foreseeable future. The project is expected to cost approximately $553 million. The City has secured financing for the project through participation in the federal Water Infrastructure Financing and Innovation (WIFIA) program through the Environmental Protection Agency (EPA), and the State Revolving Fund program (SRF Loan) through the Kansas Department of Health and Environment (KDHE). In May of 2020, the City issued the WIFIA Bond, purchased by the EPA, in a not-to-exceed amount of $331 million. Amounts from the WIFIA Bond are available to pay project costs. The first SRF Loan Agreement was finalized in November 2020. It was the first of a series of similar agreements (collectively referred to as the SRF Loan Agreements), which in aggregate are not to exceed $267 million. Funds received through the WIFIA Bond are expected to cover up to 49% of the costs of the Northwest Water Facility, and the SRF Loan Agreements are expected to cover approximately 48%. The remaining 2 - 3% will be covered by a prudent combination of cash and revenue bonds. Construction of the Northwest Water Facility is expected to be complete in fall 2024.

In the meantime, plans are in place to minimize the potential effects of asset downtimes at the current Water Treatment Plant. Recognizing the age of the WTP and the lack of redundancies in some areas, plans are in place to support the City’s ability to make emergency repairs. In addition to a $25 million contingency in the CIP, replacement parts are kept on hand and on-call contract services are available. Recent and ongoing investment in the WTP has been tailored to help curtail the risk of disruption in water service while the City prepares to transition from its existing WTP to the Northwest Water Treatment Facility.

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Description of Sewer Utility

The City’s first sewer lines were installed during the 1880s and were routed to the Arkansas River, with the raw sewage being discharged directly into the River. This method of disposal continued until 1932, when the City constructed a primary treatment plant. Additional upgrades were made to the primary treatment plant in 1956, including a bar screen, grit removal equipment, aeration tanks, clarifiers and digesters. In late 1957, design work began on a secondary treatment plant. Construction was completed and the plant was fully operational by 1960. The current Sewer Utility service area encompasses approximately 175 square miles. The collection system now includes an estimated 2,000 miles of sewer lines and 65 lift stations. Many of the sewer lines have been rehabilitated, replaced or paralleled to handle increased flow from growth and restore deteriorating lines.

The City currently operates five regional wastewater facilities. The oldest portions of Plant 1 were constructed in 1932 and after upgrades in 2005, primary processing at Plant 1 was abandoned. Plant 1 now only performs effluent screening. The water is then pumped to Plant 2 where primary and secondary treatment is performed. Thirty-five million gallons per day of Wichita’s wastewater is collected at Plant 2. Construction of the oldest portion of Plant 2 was completed in 1960. The facility has gone through several upgrades. Upgrades completed in 1988 through 1990 included secondary treatment to address ammonia removal, disinfection, and minimum dissolved oxygen level requirements. More recent upgrades included the modification and update of headworks and grit removal equipment, the addition of ultraviolet disinfection and most recently, the conversion of existing secondary treatment in the primary treatment facilities. Plant 2 also serves as the collection point for bio-solids from the City’s other plants and some neighboring municipalities. The collected solids are treated by dissolved air floatation thickening and anaerobic digestion, and are dewatered using a belt filter press. After dewatering, the material is land applied on local, privately owned, farm ground.

Wastewater flows into the treatment plants are currently within the capacity of the plants. Furthermore, the overall treatment capacity at the plants is adequate for the 20-year planning period. For Plant 2, the 2019 measured flow was 57% of its design capacity. Engineering analyses of Plant 2 treatment efficiency show that 2021 projected flows will not significantly impact operating capabilities. In 1993, the City initiated an inflow and infiltration control program and is aggressively pursuing the identified sewer rehabilitations, wet weather flow retention, and abatement programs included in the Sewer Master Plan. The Plant 2 facilities will be subjected to nutrient removal requirements within the next two permit cycles. The Utility is in the early stages of a project to upgrade existing treatment technology over the next six years (described later in the “Future Capital Projects Plan” section).

On April 1, 2001, the City of Wichita assumed operational and maintenance responsibility of the Four Mile Creek Sewage Treatment Plant, formerly owned by Sedgwick County. At that time, the facility was a 1.5 MGD activated sludge plant utilizing chlorine gas for disinfection. Plant upgrades completed in January 2005 increased the capacity to 3.0 MGD and added biological nitrogen and phosphorus removal and aerobic solids digestion. The solids digester also serves as a gravity thickener allowing for a 47-50% reduction in the volume of treated solids. Additional upgrades completed in spring 2019 increased the capacity to 6.0 MGD. The 2019 upgrades also included pumping improvements, the addition of chemical phosphorus precipitation, one additional clarifier, and conversion to ultraviolet disinfection.

Construction of Cowskin Creek Water Quality Reclamation Facility, with a design capacity of 2 MGD, was completed in the spring of 2003. This facility was designed for total nitrogen and biological phosphorous removal and utilizes ultraviolet light for disinfection. This facility uses mechanical thickeners to reduce solids volume and also has complete emergency backup power generation. The Utility is currently analyzing the need to expand the capacity of this facility in the next 5-10 years.

The fifth treatment facility, located at the Dwight D. Eisenhower National Airport, was completed in July 2010. This facility is a biological nutrient removal facility capable of treating 3 MGD. This scalping plant is designed to divert flow out of the collection system bound for Plant 2, which further extends the hydraulic capacity availability at Plant 2.

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Effluent Reuse

The Utility partnered with Spirit AeroSystems in 2015 to design and construct the City’s first effluent reuse system. The system was constructed at the Plant 2 site and exclusively serves Spirit’s nearby manufacturing facility. The system became fully operational in the spring of 2017 and is estimated to conserve 381 million gallons of drinking water per year.

Condition of Sewer Utility

Recent physical inspections by Burns & McDonnell, as part of their performance of the triennial Condition and Operations Report, indicate that the sewer system is adequate and the treatment facilities are in good repair and operating condition. The lift stations were found to be in good working condition.

National Pollution Discharge Elimination System (NPDES) Requirements

The City currently holds four NPDES permits. Plant 2, as stated above, upgraded its secondary wastewater treatment facilities in 1988 to meet treated wastewater effluent discharge permit requirements of the KDHE to conform to the State of Kansas Stream Water Quality Criteria. The City completed these improvements in May 1990 and now meets all Clean Water Act Standards. The permits for Plants 2 and 5 were renewed for 2018 through 2022. The permit for the wastewater lagoon facility was renewed for 2019 through 2023. The permit for Plant 4 expires in 2021 and the City plans to renew it at the appropriate time.

Biological nutrient removal (BNR) has been added as a part of the two remote facilities. This technology allows for current discharge limits for ammonia to be achieved, but will also allow the facilities to meet future limits for phosphorus and total nitrogen.

New ammonia standards took effect January 2018, and revised BNR regulations are expected in 2027-2028. Improvements were made where needed in order to meet the revised ammonia standards. The improvements required for the new BNR regulations are currently in the preliminary design stage. Recommendations from the City’s Utilities Optimization Program, the financing options available, negotiations with KDHE, and the governing body’s priorities will all influence the final project plan. Additional information regarding improvements to meet BNR regulations is included in the section entitled “Future Capital Project Plans.”

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Bonded Indebtedness

The following table sets forth the bonded indebtedness of the Utility (including the Series 2021A Bonds) as of June 1, 2021:

Original Principal Amount Outstanding Description of Indebtedness Series Dated Date Amount Revenue Bonds Series 2011A 11/01/2011 105,325,000 7,990,000 Refunding Revenue Bonds Series 2014A 08/01/2014 41,405,000 20,405,000 Revenue Bonds Series 2014B 12/01/2014 12,785,000 9,885,000 Refunding Revenue Bonds Series 2015B 04/01/2015 38,215,000 25,960,000 Revenue Bonds Series 2015C 11/01/2015 25,150,000 19,530,000 Refunding Revenue Bonds Series 2015D 11/01/2015 23,395,000 18,010,000 Revenue Bonds Series 2016A 07/01/2016 23,810,000 20,410,000 Refunding Revenue Bonds Series 2016B 07/01/2016 101,445,000 87,110,000 Revenue Bonds Series 2017A 06/01/2017 65,500,000 58,760,000 Refunding Revenue Bonds Series 2017B 12/01/2017 22,140,000 17,995,000 Revenue Bonds Series 2019A 03/01/2019 44,465,000 42,950,000 Refunding Revenue Bonds Series 2019B 12/01/2019 49,910,000 49,910,000 Revenue Bonds Series 2020A 05/01/2020 32,400,000 32,400,000 Revenue Bonds Series 2020B 05/14/2020 331,000,0001 29,702,9881

Refunding Revenue Bonds Series 2020C 10/01/2020 10,395,000 10,395,000 Revenue Bonds Series 2021A 06/01/2021 36,715,000* 36,715,000*

Subtotal Revenue Bonds $488,127,988 General Obligation Bonds Series 811 10/1/2014 135,905,000 $ 99,640,000

Subtotal General Obligation Bonds $ 99,640,000

Total $587,767,988 *Subject to change 1 The City issued on May 14, 2020 the WIFIA Bond (as described in “Water Treatment Facilities,” infra)in an amount not to exceed $331,000,000. As of June 1, 2021, the City expects to have drawn $29.7 million from the WIFIA Bond and anticipates drawing an additional $10.3 million through the federal fiscal year ending September 30, 2021. The City anticipates drawing an aggregate total of $60.5 million on the WIFIA Bond in the calendar year 2021.

SRF Loan Agreements

In addition to the bonded indebtedness set forth above, the City has entered into the first loan SRF Loan Agreement (as described in “Water Treatment Facilities,” infra). The first SRF Loan Agreement will finance approximately $55 million of eligible project costs for the Northwest Water Facility. The City’s payment obligations under the first SRF Loan Agreement are secured by the Net Revenues. Additional SRF Loan Agreements substantially similar in size and terms are anticipated over the next four years. The SRF Loan Agreements are expected to be in the aggregate principal amount of not to exceed $267,342,000 and are anticipated to be secured by the Net Revenues of the System on a parity basis with the City’s outstanding Utility Revenue Bonds.

19 CITY OF WICHITA, KANSAS WATER AND SEWER UTILITY STATISTICS BY CUSTOMER CLASS

For year ended December 31, 2019 (with comparative totals for the year ended December 31, 2018)

UNAUDITED

WATER UTILITY STATISTICS BY CUSTOMER CLASS Water Consumed Number of Customers Water Revenues (Thousand Gallons) CUSTOMER CLASS 2019 2018 2019 2018 2019 2018 Residential 135,309 134,438 $ 49,747,195 $ 50,854,113 7,239 7,735 Commercial / Industrial 13,727 13,598 25,355,680 26,938,608 6,035 6,263 Wholesale 14 13 5,043,229 5,420,698 1,412 1,549 Lawn Services 2,997 2,815 N/A N/A N/A N/A Fire Protection 1,650 1,591 773,322 717,961 N/A N/A Contract 342 341 793,956 937,217 131 159 Backflow Charges N/A N/A 256,518 261,165 N/A N/A Other Sales N/A N/A 430,754 459,082 29 30 Estimated Leaks N/A N/A N/A N/A 12 103 Water Utility Uses 32 29 N/A N/A 253 239 Unaccounted for Water N/A N/A N/A N/A 898 1,526 154,071 152,825 $ 82,400,654 $ 85,588,844 16,009 17,604

SEWER UTILITY STATISTICS BY CUSTOMER CLASS

Number of Customers Sewer Revenues CUSTOMER CLASS 2019 2018 2019 2018 Residential 127,831 126,879 $ 35,454,401 $ 35,302,348 Commercial 11,530 11,481 24,469,969 22,192,410 Industrial 7 9 5,573,170 1,230,945 Institutional 772 769 1,085,475 1,128,092 Wholesale 1 1 464,823 363,692 Extra Strength 16 15 2,969,606 2,093,788 140,157 139,154 $ 70,017,444 $ 62,311,275

Water & Sewer Customers Water and Sewage Treated

160,000 24,000 155,000 22,000 150,000 20,000 145,000 18,000 16,000 140,000 14,000 135,000 Million Gallons Million 12,000 130,000 10,000 125,000 8,000

WATER SEWER WATER SEWER

REPORT IN BRIEF

2019 2018 Change Number of Water Customers 154,071 152,825 0.82% Number of Sewer Customers 140,157 139,154 0.72% Miles of Water Line 2,397 2,386 0.46% Miles of Sanitary Sewer Line 2,068 2,057 0.53% Water Produced (Million Gallons) 16,009 17,604 -9.06% Wastewater Treated (Million Gallons) 11,376 11,528 -1.32% Cost of Treated, Pressurized Water per 1000 gal. $ 0.92 $ 0.83 10.84% Cost of Treated, Wastewater per 1000 gal. $ 1.18 $ 1.30 -9.23%

20 CITY OF WICHITA, KANSAS UNAUDITED WATER UTILITIES NET REVENUES AVAILABLE FOR DEBT SERVICE AND CAPITAL EXPENDITURES MADE FROM OPERATING REVENUES

For the year ended December 31, 2019

Water Sewer Utility Utility Combined REVENUES Charges for services and sales $ 85,197,316 $ 65,697,011 $ 150,894,327 Capital contributions - cash 2,620,226 1,144,816 3,765,042 Bond premium amortization 2,178,673 1,457,873 3,636,546 Other revenues (expenses) 693,446 450,042 1,143,488 Gain on capital assets 152,243 114,300 266,543 Interest and investment earnings 209,118 997,976 1,207,094 Total gross earnings 91,051,022 69,862,018 160,913,040

OPERATIONS AND MAINTENANCE Personnel services 12,236,883 13,675,447 25,912,330 Contractual services 13,406,333 9,686,941 23,093,274 Materials and supplies 4,421,370 4,342,275 8,763,645 Other operating expenses 1,579,530 871,296 2,450,826 Administrative charges 674,834 333,526 1,008,360 Total operating expenses 32,318,950 28,909,485 61,228,435

Net revenues available for debt service $ 58,732,072 $ 40,952,533 $ 99,684,605

REVENUE BOND DEBT SERVICE $ 22,106,202 $ 20,965,379 $ 43,071,581

DEBT SERVICE COVERAGE RATIO 2.66 1.95 2.31

Gross earnings $ 91,051,022 $ 69,862,018 $ 160,913,040 Less: capital contributions - cash 2,620,226 1,144,816 3,765,042 Less: bond discount amortization 2,178,673 1,457,873 3,636,546 Less: gain on capital assets 152,243 114,300 266,543 Less: interest and investment earnings 209,118 997,976 1,207,094 Total operating revenues $ 85,890,762 $ 66,147,053 $ 152,037,815

CAPITAL EXPENDITURES FROM OPERATING REVENUES $ 4,781,947 $ 2,394,347 $ 7,176,294

PROPERTY INSURANCE

As of December 31, 2019

Insurance Company Coverage Details Deductible Coverage Period Zurich *All risk coverage on real and personal property on a Per occurrence. 01-19 to 01-20 replacement cost basis, with a value limitation of $350 Property: $100,000; million. Wind and Hail: $500,000

Zurich *Comprehensive coverage for steam boilers, air Per occurrence - 01-19 to 01-20 conditioners, and electric motors on a repair or $100,000 replacement cost basis.

* Property insurance for the Utilities is included in the City's coverage. Limits shown are for the entire City.

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Operating and Financial Data

The following is selected operating data of the Utility compiled by Utility staff, which contains certain modifications from statistics contained in the City of Wichita, Kansas Comprehensive Annual Financial Report for the year ended December 31, 2019.

UTILITY BILLING PROCEDURES AND CURRENT RATES

Customers of the Utility are billed monthly and the rates charged by the Utility are restructured to encourage water conservation. The rates provided below are those in effect on June 1, 2021.

The average monthly residential water and sewer bill in June 2021 for a customer using approximately 7,500 gallons of water per month with an average winter consumption (AWC) of 6,000 gallons would be $76.92, excluding applicable fees.

Water Sewer Meter size Inside Outside Outside Inside City (Inches) the City and City

5/8 $16.41 $26.27 $10.42 $16.70 3/4 $16.41 $26.27 $10.42 $16.70 1 $16.41 $26.27 $10.42 $16.70 1.5 $21.34 $34.14 $16.84 $26.95 2 $27.16 $43.49 $25.20 $40.18 3 $45.73 $73.20 $72.86 $116.58 4 $60.74 $97.24 $92.68 $148.27 6 $91.97 $147.23 $175.30 $280.48 8 $122.95 $196.83 $249.86 $399.73 10 $157.31 $251.85 $385.33 $616.52 12 $218.43 $349.67 $562.40 $899.83

Rates for consumption charges in 2021 per 1,000 gallons are as follows:

Water Inside Outside Wholesale <110% of AWC $2.61 $4.18 $3.02 111%-310% $9.11 $14.59 $15.66 >310% of AWC $13.33 $21.34 $23.45

Sewer 4.11 6.57 3.25

Future Capital Project Plans

In addition to the Northwest Water Facility, information pertaining to which is set forth above, The City is in the preliminary design stage of the biological nutrient removal (BNR) improvements needed in the sewer utility in order to meet changing federal regulations. A Business Case Evaluation was completed in late 2020 to determine the recommended approach to the improvements, which is to make the majority of the upgrades to Plant 2. The upgrades will enable Anaerobic-Anoxic-Oxic Activated Sludge (A2O) and sidestream treatment technology. This project approach was approved by the City Council in January 2021. The current cost estimate is within the amount that has been included in the City’s CIP ($356M) and future rate projections for a number of years. Discussions with the Kansas Department of Health and Environment (KDHE) in January 2021 indicated approximately $175 million could be financed through the State Revolving Fund (SRF) loan program. The City is currently developing a letter of interest to pursue Water Infrastructure Finance and Innovation Act (WIFIA) funding for approximately 49% of the project costs. If successful with both WIFIA and SRF, any remaining project costs will be financed with a prudent combination of revenue bonds and cash. Design work is expected to begin later in 2021 and continue through 2022, followed by construction at the beginning of 2023. The City’s next permit will

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expire at the end of 2027, which is also the deadline that was negotiated with the KDHE for this project. All improvements are expected to be complete by the end of 2027.

Another major capital project included in the City’s CIP is relocation and replacement of a 78-inch wastewater main that runs under a major interstate. The estimated cost is approximately $23 million. Preliminary design work began in 2019 and construction is expected to begin later in 2021. Over the next 5-10 years, various components of the City’s high service pump station (Hess Pump Station) will be improved to ensure it is capable of serving at the same level as the new water treatment plant. Various drought resiliency projects in the City’s Public Water Supply Plan, ongoing lift station improvements, and renewal and replacement of water and sewer pipelines are also planned over the next 10 years.

RATING

S&P Global Ratings, a division of S&P Global Inc., has assigned a rating of “AA-” to the Series 2021A Bonds. Such rating reflects only the view of such rating agency, and an explanation of the significance of such rating may be obtained therefrom. No such rating constitutes a recommendation to buy, sell, or hold any obligations, including the Series 2021A Bonds, or as to the market price or suitability thereof for a particular investor. The Issuer furnished such rating agency with certain information and materials relating to the Series 2021A Bonds that have not been included in this Official Statement. Generally, rating agencies base their ratings on the information and materials so furnished and on investigations, studies and assumptions by the rating agencies. There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect on the market price of the Series 2021A Bonds.

ABSENCE OF LITIGATION

The Issuer is a defendant in various actions pending or in process for property damages, civil rights, personal injury and other miscellaneous claims. The ultimate liability that might result from final resolution of these matters is not presently determinable. City staff and the City’s Department of Law are of the opinion that the final outcome of these matters will not have an adverse material effect on the City’s financial condition.

There is currently no controversy, suit or other proceeding of any kind pending, or to the knowledge of the Governing Body, City staff or the City’s Department of Law, threatened which would adversely affect the validity of the Series 2021A Bonds or the ability of the Issuer to provide for the payment of the principal of and the interest on the Series 2021A Bonds in the manner described herein. Concurrently with the delivery of the Series 2021A Bonds, the Issuer will deliver an executed non-litigation certificate in the form required by State law.

LEGAL MATTERS

Approval of Series 2021A Bonds

All matters incident to the authorization and issuance of the Series 2021A Bonds are subject to the approval of Gilmore & Bell, P.C., Wichita, Kansas (“Bond Counsel”). The factual and financial information appearing herein has been supplied or reviewed by certain officials of the Issuer, as referred to herein. Bond Counsel has participated in the preparation of the Official Statement but expresses no opinion as to the accuracy or sufficiency thereof, except for the matters appearing in the sections of this Official Statement captioned “THE BONDS,” “LEGAL MATTERS,” “TAX MATTERS” and “APPENDIX C – SUMMARY OF FINANCING DOCUMENTS.” Payment of the legal fee of Bond Counsel is contingent upon the delivery of the Series 2021A Bonds. Certain other legal matters will be passed on for the City by Jennifer Magaña, Esq., Director of Law and City Attorney.

TAX MATTERS

The following is a summary of the material federal and State of Kansas income tax consequences of holding and disposing of the Series 2021A Bonds. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Series 2021A Bonds as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of 23

Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Series 2021A Bonds in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Series 2021A Bonds.

Opinion of Bond Counsel

In the opinion of Bond Counsel, under the law existing as of the issue date of the Series 2021A Bonds:

Federal Tax Exemption. The interest on the Series 2021A Bonds [(including any original issue discount properly allocable to an owner thereof)] is excludable from gross income for federal income tax purposes.

Alternative Minimum Tax. Interest on the Series 2021A Bonds is not an item of tax preference for purposes of computing the federal alternative minimum tax.

Bank Qualification. The Series 2021A Bonds have not been designated as “qualified tax-exempt obligations” for purposes of Code § 265(b).

Kansas Tax Exemption. The interest on the Series 2021A Bonds is exempt from income taxation by the State of Kansas.

Bond Counsel’s opinions are provided as of the date of the original issue of the Series 2021A Bonds, subject to the condition that the Issuer comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2021A Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series 2021A Bonds in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2021A Bonds. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Series 2021A Bonds, but has reviewed the discussion under the heading “TAX MATTERS.”.

Other Tax Consequences

[ Original Issue Discount. For Federal income tax purposes, original issue discount (“OID”) is the excess of the stated redemption price at maturity of a Series 2021A Bond over its issue price. The issue price of a Series 2021A Bond is the first price at which a substantial amount of the Series 2021A Bonds of that maturity have been sold (ignoring sales to Series 2021A Bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents, or wholesalers). Under Code § 1288, OID on tax-exempt Series 2021A Bonds accrues on a compound basis. The amount of OID that accrues to an owner of a Series 2021A Bond during any accrual period generally equals: (a) the issue price of that Series 2021A Bond, plus the amount of OID accrued in all prior accrual periods; multiplied by (b) the yield to maturity on that Series 2021A Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period); minus (c) any interest payable on that Series 2021A Bond during that accrual period. The amount of OID accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for Federal income tax purposes, and will increase the owner’s tax basis in that Series 2021A Bond. Prospective investors should consult their own tax advisors concerning the calculation and accrual of OID.]

[ Original Issue Premium. If a Series 2021A Bond is issued at a price that exceeds the stated redemption price at maturity of the Series 2021A Bond, the excess of the purchase price over the stated redemption price at maturity constitutes “premium” on that Series 2021A Bond. Under Code § 171, the purchaser of that Series 2021A Bond must amortize the premium over the term of the Series 2021A Bond using constant yield principles, based on the purchaser’s yield to maturity. As premium is amortized, the owner’s basis in the Series 2021A Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner. This will result in an increase in the gain (or decrease in the loss) to be recognized for Federal income tax purposes on sale or disposition of the Series 2021A Bond prior to its maturity. Even though the owner’s basis is reduced, no Federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of bond premium.]

Sale, Exchange or Retirement of Series 2021A Bonds. Upon the sale, exchange or retirement (including redemption) of a Series 2021A Bond, an owner of such Series 2021A Bond generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Series 2021A Bond (other than in respect of accrued and unpaid interest) and such owner’s adjusted tax basis in the Series 2021A Bond. To the extent the Series 2021A Bonds are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Series 2021A Bond has been held for more than 12 months at the time of sale, exchange or retirement. 24

Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Series 2021A Bonds, and to the proceeds paid on the sale of Series 2021A Bonds, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner’s federal income tax liability.

Collateral Federal Income Tax Consequences. Prospective purchasers of the Series 2021A Bonds should be aware that ownership of the Series 2021A Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with “excess net passive income,” foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Series 2021A Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Series 2021A Bonds should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Series 2021A Bonds, including the possible application of state, local, foreign and other tax laws.

CUSIP NUMBERS

If the Series 2021A Bonds qualify for the assignment of CUSIP numbers such numbers will be printed on the Series 2021A Bonds; however, neither the failure to print such numbers on any Series 2021A Bond nor any error with respect thereto will constitute cause for failure or refusal by the Purchaser to accept delivery of the Series 2021A Bonds. Piper Sandler & Co. will apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking Board. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the Issuer.

MUNICIPAL ADVISOR

The City has retained Piper Sandler & Co., Leawood, Kansas, as municipal advisor in connection with certain aspects of the issuance of the Series 2021A Bonds (the “Municipal Advisor”). The Municipal Advisor is a “municipal advisor” as defined in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Municipal Advisor has assisted the City in the preparation of this Official Statement and in other matters relating to the issuance of the Series 2021A Bonds. The Municipal Advisor will not be a manager or a member of any underwriting group submitting a proposal for the purchase of the Series 2021A Bonds. The fees of the Municipal Advisor are contingent upon the issuance of the Series 2021A Bonds.

UNDERWRITING

The Series 2021A Bonds have been sold at public sale by the Issuer to [an account managed by] [Series 2021A Purchaser], [City, State] (the “Original Purchaser”) on the basis of lowest true interest cost. The Original Purchaser has agreed to purchase the Series 2021A Bonds at a price equal to the principal amount of the Series 2021A Bonds, plus accrued interest from the Dated Date to the Issue Date[, plus a premium of $______].

Simultaneously with the delivery of the Series 2021A Bonds, the Original Purchaser will certify to the Issuer that the Series 2021A Bonds will be offered to the public initially at the price determined to produce the yield to maturity or applicable redemption date set forth on the inside cover page of this Official Statement. The Original Purchaser may offer and sell the Series 2021A Bonds to certain dealers (including dealers depositing the Series 2021A Bonds into investment trusts) at prices other than the price stated on the inside cover page hereof and may change the initial offering price from time to time subsequent to the date hereof. In connection with the offering, the Original Purchaser may overallot or effect transactions which stabilize or maintain the market price of the Series 2021A Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time.

MISCELLANEOUS

References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement, they will be furnished on request. So far as any statements are made in this Official Statement involving matters of opinion, estimates, projections or forecasts, whether or not expressly stated as such, they are not to be construed as representations of fact. The information and expressions of opinion in this 25

Official Statement are subject to change, and neither the delivery of this Official Statement nor any sale made hereunder shall create any implication that there has been no change in the affairs of the Issuer since the date hereof.

The agreement of the Issuer with the owners of the Series 2021A Bonds is fully set forth in the Series 2021A Bond Resolution, and neither any advertisement for the Series 2021A Bonds or this Official Statement is to be construed as constituting an agreement with any owner of the Series 2021A Bonds. A summary of the Bond Resolution is set forth in APPENDIX C – SUMMARY OF FINANCING DOCUMENTS; a complete copy is on file in the office of the City Clerk.

APPROVAL OF PRELIMINARY OFFICIAL STATEMENT

The lawful distribution of this Official Statement has been duly approved by the City's Governing Body. Authorization to lawfully redistribute this Official Statement is hereby given, but this entire Official Statement, and not portions hereof, must be redistributed.

CITY OF WICHITA, KANSAS

By: Brandon J. Whipple, Mayor

By: Mark L. Manning, Director of Finance

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APPENDIX A

CITY OF WICHITA, KANSAS

(THIS PAGE INTENTIONALLY LEFT BLANK) CITY OF WICHITA, KANSAS

GENERAL INFORMATION

Location

Wichita, the largest City in Kansas, population 389,9381, is the county seat of Sedgwick County. Major highways, including the Kansas Turnpike and Interstate I-35, link the City with a large trade area that encompasses a population of more than one million people2 within a 100-mile radius. The nearest large cities are Denver to the west, Kansas City to the northeast, and Oklahoma City and Tulsa to the south and southeast.

Historical Background

Wichita became a town in 1868, was incorporated in 1870 and has been a City of the first class since 1886. The original stimulus to the City's economic development was the extension of the Santa Fe Railway into Wichita in 1872. The City's early growth paralleled the expanding agricultural productivity of the central plains states, and by 1900 the City was an important regional center for the processing of agricultural products and the distribution of farm equipment. In 1914, the discovery of oil broadened the economic base, drawing numerous services, distributive enterprises, and metal-working industries to the City. From the earliest days of the aircraft industry, Wichita was a leading producer of general aviation and commercial aircraft. McConnell Air Force Base was activated in 1951 and remains an important factor in the community.

Government

In 1917, Wichita became one of the first municipalities in the United States to adopt the Commission-Manager form of government. Effective April 14, 1987, the title "City Commission" was changed to "City Council" and instead of being elected at-large, five council members were nominated by district and elected at-large. In November 1988, Wichita voters

1 Source: U.S. Census Bureau, 2019 Census Population Estimates. 2Source: Estimated by the Center for Economic Development and Business Research, W. Frank Barton School of Business, Wichita State University, based on Nielsen 2013 population estimates. Estimate includes Kansas population only; not the portion of population within the 100-mile radius located in Oklahoma. A-1 approved a referendum to elect a five-member City Council by pure district elections and a full-time Mayor by city-at-large elections. On February 10, 1989, Charter Ordinance 115 was adopted and provided for the five council member seats to be increased to six by subdividing the City into six districts based on the 1990 Census. The six Council members and the Mayor serve four-year terms with the Council members' terms overlapping. The City Council and Mayor conduct all legislative functions for the City of Wichita and establish general policies, which are executed by the City Manager.

Employees

Total authorized positions for 20213 for the City of Wichita are as follows: Full-Time Full-Time Equivalents Total Employees 3,059 3,127

Kansas law prohibits strikes by public employees and provides procedures for the resolution of disputes. In the event an agreement cannot be reached between the City and a public employees union, an impasse is declared. Upon declaration of an impasse in the negotiations, the State’s Public Employee Relations Board appoints an independent arbitrator. The arbitrator's recommendations are not binding upon the parties to the negotiations, and all contracts must be approved by the City Council.

Medical Care

First class medical care is the standard in Wichita’s medical community. Because of a heavy emphasis on research and training, Wichita emerged as a nationally recognized, state-of-the-art health care center. The Wichita MSA4 (Metropolitan Statistical Area) boasts 18 acute care and freestanding specialty hospitals, providing the community with approximately 2,000 licensed beds. There are approximately 100 nursing homes and assisted living facilities, 1,340 physicians and 320 dentists in the five-county area5. In 2019, local hospitals employed 9,900 workers in the MSA, and the larger health care and social assistance industry employed 41,000 employees.6 In addition, there are several research institutions in the area. Numerous health care and specialty clinics provide comprehensive patient care and same-day surgery. There are at least seven emergency centers in the Wichita area that provide medical care with no appointments and offer extended hours. Several medical referral services and a complete 911 emergency medical service are available throughout Sedgwick County.

Cultural and Recreational Facilities

Wichita developed into a civic center with many cultural and recreational opportunities. The Riney Fine Arts Gallery, Edwin A. Ulrich Museum of Art, Mary R Koch Arts Center, and the Wichita Art Museum all house fine art collections. Quality theater groups, such as the Wichita Community Theatre, Music Theatre Wichita, Wichita Children’s Theatre and Dance Center, and Music Theatre for Young People, visit the Wichita stages year after year, though the 2020 season was largely cancelled due to coronavirus concerns. The groups plan to resume their productions in 2021 as the area recovers from the coronavirus outbreak. Diverse museums, such as the Wichita-Sedgwick County Historical Museum, the Mid- America All-Indian Center, the Old Cowtown Museum, the Kansas Aviation Museum, the Museum of World Treasures, the Great Plains Transportation Museum, the Kansas Sports Hall of Fame, the Original Pizza Hut Museum, and the Kansas African American Museum, reveal their perspectives on the past. While these museums have closed, limited hours, or limited events during the coronavirus outbreak, they all plan to reopen at full capacity once the outbreak ends. A $600,000 museum addition to Riverfront Stadium was approved by the City Council in January 2021; the museum will document the rich history of baseball in the Wichita area, including past minor league teams and the National Baseball Congress World Series.

Exploration Place, the Sedgwick County science and discovery center, hosts permanent and traveling exhibits, summer camps and Wichita Regional Science and Engineering Fairs, all of which encourage a deeper interest in science for all ages. The $20 million Mary R Koch Arts Center, home of MARK Arts, opened in January 2018. The facility features an events center, gallery space for national exhibits, a sculpture garden, and spaces for studio artists and youth. Many of Wichita’s private art galleries participate in the city’s monthly First Friday event, a gallery crawl throughout the city’s downtown

3Source: City of Wichita 2020-2021 Adopted Budget, p. 321. 4The Wichita MSA is comprised of Butler, Harvey, Sedgwick and Sumner counties. This metropolitan statistical area delineation was issued by The Office of Management and Budget in September 2018. 5 Source: Kansas Statistical Abstract (2019), Section 17. 6Source: Kansas Department Of Labor, Current Employment Statistics data, 2019 Annual Average. Employment number is for the five-county MSA delineation, including Kingman County, as the Bureau of Labor Statistics has not updated their metropolitan employment programs with the September 2018 MSA delineations. A-2 featuring over two dozen locations. As the largest art museum in the state of Kansas, 2021 is the Wichita Art Museum’s 86th year of preserving, collecting, and promoting art. In April 2020, the museum completed a $700,000 renovation of its main entrance and great hall.

Built in 1969, Century II celebrates its 52nd year as Wichita’s downtown performing arts and convention headquarters in 2021; the facility contains a concert hall, convention hall, exhibition hall, and an expo hall. The 15,004 seat INTRUST Bank Arena is Wichita’s largest indoor arena since it opened in 2010, and is home to concerts, basketball games, and ice hockey games. From 2010 to 2019, the arena hosted 890 events with more than 3.8 million guests. These events generated more than $168 million in new economic activity in the area from visitors and $191 million from local residents, for a total economic impact of $323 million.7 The Wichita Union Stockyards, a new 800-capacity concert venue and event center, opened in November 2019.

Recreational opportunities abound in and around Wichita. Inside the city are 144 municipal parks and public open spaces covering more than 5,000 acres, along with more than 100 miles of bicycle paths and lanes. Botanica, the Wichita Gardens, is the city’s living museum of plants and flowers. The $3 million carousel pavilion opened at Botanica in November 2019, featuring a restored 1949 carousel, after five years of construction. Sedgwick County Zoo is nationally acclaimed in natural habitat design and has become one of the top zoos in the world. The zoo began construction on a new $10 million administration complex and entry plaza in December 2019, which is expected to be completed in May 2021 along with an expansion to the Amur leopard habitat. The city's compact size allows minimal travel time (average 30 minutes) to outlying areas with open prairies and lakes.

Wichita is home to a number of professional and college sports teams, including the Wichita Thunder hockey team, the Wichita Force indoor football team, the FC Wichita soccer team, the Wichita Wizards basketball team, and the Wichita Wind Surge baseball team. The Wichita State Shockers men’s college basketball program consistently attracts sell-out crowds to Charles Koch Arena and in 2017 joined the American Athletic Conference. The team qualified for the NCAA men’s basketball tournament in each season from 2012 to 2018 and in 2019 reached the semi-finals of the National Invitational Tournament. The INTRUST Bank Arena hosted the first and second round NCAA men’s basketball tournament games in 2018, with over 40,000 tickets sold. The Arena was scheduled to host NCAA men’s basketball tournament games again in 2021, but, due to the novel coronavirus outbreak, all tournament games were moved to Indianapolis and the Arena will host men’s tournament games in 2025. The Arena will also be one of four hosts for the Regional Round of the NCAA women’s basketball tournament in 2022, the first time Wichita has been selected for an advanced round of the tournament.

The Wichita Wind Surge, formerly the New Orleans Baby Cakes, moved to Wichita for the 2020 baseball season. Construction on the new $75 million Riverfront Stadium at the former location of the old Lawrence-Dumont Stadium was completed in March 2020, just before the now-canceled 2020 season was originally expected to begin. The team announced in December 2020 that the team will become a Double-A minor league affiliate of the Minnesota Twins. The area surrounding the stadium will be home the $127 million Riverfront Village mixed use area, with retail, office space, a hotel, apartments, and other amenities. The twin-sheet ice skating arena, Wichita Ice Center, is available for public skating, as well as figure skating, hockey lessons, and league play. Wichita has four city-owned golf courses, two other golf courses for public play and four membership-only courses.

Water sports and fishing are available on two federal reservoirs and one county lake that are within 30 minutes of Wichita. Additionally, eighteen recreational areas are within a 200-mile radius of the city. Because Wichita lies within the central waterfowl flyway, huge flocks of waterfowl are a common sight in our area during the spring and fall. Deer, pheasant, quail, wild turkey, and ducks are just a few examples of wild game available in the area.

Public Air Transportation

Wichita Dwight D. Eisenhower National Airport (formerly Wichita Mid-Continent Airport), the largest commercial air carrier and general aviation complex in Kansas, provides accommodations for all aircraft. Dwight D. Eisenhower National Airport's campus of 3,300 acres is home to more than 60 tenants including air cargo; general aviation businesses; airport concessions (restaurants, hotel, ground transportation); rental car companies; fixed-base operators; corporate hangars; government, including the control tower, weather services, Federal Aviation Administration, and the Transportation Security Administration; and two aircraft manufacturers.

7 “Intrust Bank Arena Reports Economic Impact Study Results Through First 10 Years,” https://www.intrustbankarena.com/release/366/intrust-bank-arena- reports-economic-impact-study-results-through-first-10-years A-3 Col. James Jabara Airport, a general aviation airport, consists of 855 acres and includes a 6,100-foot runway, an instrument landing system, associated taxiways and aprons, four corporate hangars, as well as a first-class fixed base operation complete with T-hangar storage. Jabara is also home to the National Center for Aviation Training (NCAT), which is located just north of the airport’s campus. NCAT is a first-rate training facility focusing on general aviation manufacturing and aircraft and power plant mechanics. NCAT was made possible by the following funding sources: Sedgwick County, the State of Kansas, the U.S. Economic Development Association, the U.S. Small Business Administration, and the U.S. Department of Housing & Urban Development. Wichita State University’s Campus of Applied Sciences and Technology (formerly Wichita Area Technical College) serves as the managing partner for the Center, collaborating with Wichita State University's National Institute for Aviation Research (NIAR), to provide industry-driven training courses.

Passenger service in Wichita is available to 13 nonstop destinations through the following airlines – Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Southwest Airlines, and United Airlines. Frontier Airlines will begin offering direct flights to Las Vegas in March 2021, increasing the number of days in which direct service to Las Vegas in available. Four major carriers, DHL, Federal Express, UPS Supply Chain Solutions, and UPS, provide cargo service.

General aviation is served by specialized retailers who provide aircraft related accessories, service, rental, storage, and flight training. Since its inception, the Wichita Airport System, consisting of both Dwight D. Eisenhower National Airport and Colonel James Jabara Airport, has been operated and developed without local tax support.

In 2017, Burns & McDonnell Engineering Company, with assistance from CDM Smith, completed the Kansas Aviation Economic Impact Study Update for the Kansas Department of Transportation’s Division of Aviation. The study estimated, for 2015, the total employment impact of the Wichita Dwight D. Eisenhower National Airport and Col. James Jabara Airport was 21,631 workers, with a total payroll of approximately $1.25 billion. The total economic activity (direct, indirect, and induced) related to on-airport activities, visitor spending, and payroll spending were estimated to total more than $5.2 billion.

On June 3rd, 2015, Wichita Eisenhower National Airport opened its new $160 million terminal, and it has served more than 7.9 million passengers in its first five years of operation. The 273,000 square foot state-of-the-art facility modernized the airport and allows for easy continued expansion for air service in Wichita, with capabilities of accommodating over 2 million passengers annually. Since the opening of the new terminal, the airport set traffic records for three consecutive years in 2017, 2018, and 2019. In the fall of 2019, a major rehabilitation project of the two main runways at the airport began to extend the life of the runways an additional 15 years, funded by two federal grants worth $21.9 million, with an expected completion date of August 2021.

The local share of financing major airport improvements has been derived from the sale of general obligation bonds and passenger facility charges. These bonds have either been retired or are currently being repaid from airport revenues. Federal grants, general obligation bonds, and passenger facility charges, along with airport revenues, will finance the majority of planned improvements.

Military Installations

McConnell Air Force Base borders southeast Wichita. The host unit is the 22nd Air Refueling Wing flying KC-135 Stratotankers, supporting worldwide air-to-air refueling and airlift. McConnell is a total force base, housing tenant units, which include the Air Force Reserve’s 931st Air Refueling Group and the Air National Guard’s 184th Intelligence Wing. McConnell has 2a total force strength of 6,924 active, guard, reserve and civilian personnel. The total impact of McConnell Air Force Base on the local economy in fiscal year 2018 was $617.2 million within a 50-mile radius of the base, a 5.3 percent increase from 2017.8 After being selected in 2014 as the first active duty KC-46A Pegasus main operating base and $267 million in facility upgrades, McConnell received its first two KC-46A Pegasus aircraft in January 20199. McConnell will eventually be the operating base to 36 KC-46A planes, which will replace the current KC-135 Stratotankers. As of January 2021, the base received 21 of its scheduled 36 KC-46A refueling craft, and Boeing was awarded a contract for $1.7 billion to produce 12 additional tankers.10 The Friends of McConnell community support group received the 2017 Abilene Trophy, a national award for the community that provides the strongest support to its Air Force Base.11

8Source: McCoy, Daniel. “McConnell Air Force Base Economic Impact Increased in 2018”, Wichita Business Journal, January 16, 2019. 9 Source: McCoy, Daniel. “McConnell Air Force Base to receive first Boeing tanker January 25”, Wichita Business Journal, January 15, 2019. 10 Source: McCoy, Daniel. “Boeing awarded $1.7 billion for 12 more Pegasus tankers”, Wichita Business Journal, January 13, 2021. https://www.bizjournals.com/wichita/news/2021/01/13/boeing-awarded-1-7b-for-12-more-pegasus-tankers.html 11 Source: Alanis, Kaitlyn. “Friends of McConnell gets national award for support of air base”, Wichita Eagle, May 28, 2017. http://www.kansas.com/news/local/article153168444.html A-4 Education Institutions

The City of Wichita is served by eight unified school districts (USDs). USD 259 Wichita Public Schools, the largest district in the area, operates approximately 85 schools, including elementary, middle, and high schools, as well as alternative, magnet, and special schools. Enrollment declined 4.8 percent at USD 259 Wichita Public Schools in the fall of 2020 to 46,987 students due to the impact of the novel coronavirus. The decline was primarily in elementary school enrollment, while middle school and high school enrollment remained relatively flat. From 2008 to 2019, USD 259’s total enrollment declined by 0.6 percent.

In addition to the public schools, there are dozens of private and parochial schools serving preschool through high school students, as well as those needing special education. Post-secondary educational opportunities abound, including numerous private and public technical education institutions.

Twelve colleges and universities in the local area serve Wichita, including Wichita State University, University of Kansas School of Medicine, Friends University, and Newman University. As of July 1st, 2018, Wichita Area Technical College became the Wichita State University Campus of Applied Sciences and Technology, a formalization of the long partnership between the two campuses. In the fall of 2019, Wichita State University’s enrollment grew to 16,058 students, and the university reported the highest number of enrolled student credit hours in its history. The Campus of Applied Sciences and Technology reported record enrollment as well, with 4,920 students in the fall of 2019. Enrollment declined at both campuses in 2020 due to the novel coronavirus outbreak, though the Campus of Applied Sciences enrollment of 4,607 students was still the second highest in school history.

Since 2017, Wichita State University has built several new buildings as part of their new “Innovation Campus” initiative, with a new focus on technology transfer, licensing and start-ups, and is continuing to expand with ongoing construction. The Innovation campus began with the construction of four new buildings, including the Experiential Engineering building, in 2017. A second partnership building, two retail buildings, and an experiential learning elementary school were added in 2018, along with a new YMCA building, a Hyatt Place hotel, and the National Institute for Aviation Research’s Advanced Virtual Engineering and Testing Labs facility in 2020. The campus continues to expand, with construction for the new $50 million building for the Barton School of Business, Woolsey Hall, which broke ground in October 2020, and a new partnership building that will be the future home of NetApp’s Wichita operations, which began construction in the summer of 2020. Future construction plans include additional business partnership buildings, which will provide students with unique learning experiences, collaborating with firms partnered on campus.

ENROLLMENT FIGURES

School Year 2020/21 2019/20 2018/19 2017/18 2016/17 2015/16

USD 25912 High School 13,118 13,252 13,121 13,128 13,013 13,113 Middle School 10,713 10,801 10,528 10,351 10,167 10,138 Elementary 22,839 24,956 25,739 26,365 26,883 27,048 Non-Graded 317 366 565 572 503 689 Total 46,987 49,375 49,953 50,416 50,566 50,988

PAROCHIAL13 Total 7,809 7,988 8,056 8,127 8,152 8,201

UNIVERSITIES14 Wichita State University 15,500 16,058 15,784 15,081 14,474 14,495 Friends University N/A 1,818 1,628 1,762 2,100 2,032 Newman University 2,068 3,205 3,373 3,378 3,170 3,595

12Fall enrollment numbers from USD 259. Elementary includes grades K though 5, middle school includes grades 6 through 8 and high school includes grades 9 through 12. 13Parochial fall enrollment figures furnished by the Catholic School Office (6,959 for all of Sedgwick County, excluding Pre-K, and 850 for Wichita Collegiate School, including two years old through high school in 2020). 14Fall enrollment numbers. Friends University Fall 2019 enrollment data not available at time of publication. A-5 Growth

Increases in land area and the number and size of manufacturing firms have contributed to the City's growth. This growth is reflected in annexations, which have increased the City's total land area from 22 square miles in 1940 to 165.9 square miles as of 2021. World War II, with its enormous demand for aircraft production, brought about a 50 percent increase in the City's population. Continued diversification of industry since then, mixed with abundant resources and a skilled labor force, contributed to economic growth in the area.

Demographic Trends

The metropolitan statistical area (MSA) includes Butler, Harvey, Sedgwick, and Sumner counties.15 Its 2019 population totaled 640,218.16 Sedgwick County represents 80.6 percent of the area's population, with an estimated 516,042 residents in 2019.17 Since 2010, the Wichita MSA’s population grew 2.6 percent, while Sedgwick County grew 3.4 percent. Though these growth rates are slower than the national average, both the metropolitan area and the county grew more rapidly than average for the state of Kansas.

International migration contributed to the Wichita metropolitan area’s growth in recent years, with positive net international migration of more than 9,000 individuals since 201018. In 2018, 14.4 percent of Wichita residents moved to a new residence within the county, and 4.3 percent moved to Wichita from a different county, state, or country, while 4.3 percent of the previous year’s residents moved from Wichita to a different county or state19.

While the city’s population has increased, the city's population density decreased by nearly 50 percent in the past few decades as increases to the geographic size of the city outpaced population growth. Today there are approximately 2,351 persons per square mile in Wichita, compared to 4,625 per square mile in 1960 when density within the city limits peaked. In recent years, the majority of the population and housing growth occurred along the far west/northwest and far east/northeast peripheries of the city, and into the unincorporated portions of the county, and these growth trends are expected to continue.

The racial and ethnic composition of Wichita's population is comparable to that of the nation, with an age distribution younger than the U.S. population as a whole. The median age in the City of Wichita is 35.3 years, younger than the Wichita metropolitan area’s median age of 36.4 years and the nation’s 38.5 years. Among the City of Wichita’s population 25 years and over, 89 percent are high school graduates and 30.9 percent have a bachelor’s degree or higher. 20

In 2019, median household income was estimated to be $59,779 for the Wichita MSA, and approximately 7.7 percent of families were estimated to be living in poverty, which was 0.9 percentage points below the national average of 8.6 percent.

Population Growth Trends

Year City of Wichita Percentage Change Sedgwick County Percentage Change 1950 168,300 46.4% 222,300 55.1% 1960 254,700 51.3% 343,200 54.4% 1970 276,600 8.6% 350,700 2.2% 1980 279,300 1.0% 367,100 4.7% 1990 304,000 8.8% 403,700 10.0% 2000 344,300 13.3% 452,900 12.2% 2010 382,368 11.1% 498,365 10.0% Source: U.S. Bureau of the Census, Population of the 100 Largest Cities and Other Urban Places in the United States: 1790 to 1990, Working Population Paper No. 27, 2000 and 2010 population counts from the respective decennial census.

15This metropolitan statistical area delineation was issued by The Office of Management and Budget in September 2018. At that time Kingman County was Removed from the Wichita MSA. 16Source: U.S. Census Bureau, 2019 Metropolitan Statistical Area Population Estimates. 17Source: U.S. Census Bureau, 2019 County Population Estimates. 18Source: U.S. Census Bureau, 2019 Metropolitan Statistical Area Population Estimates. 19Source: U.S. Census Bureau, 2018 American Community Survey 1-Year Estimates. 20Source: U.S. Census Bureau, 2019 American Community Survey 1-Year Estimates. A-6

Age Distribution

City of Wichita Wichita Percent of Total Sedgwick County Percent of Total MSA* Percent of Total Under 5 years 25,587 6.6% 34,767 6.7% 42,667 6.7% Age 5 to 9 26,415 6.8% 34,083 6.6% 42,707 6.7% Age 10 to 14 30,717 7.9% 40,795 7.9% 50,040 7.8% Age 15 to 19 24,837 6.4% 33,774 6.5% 42,877 6.7% Age 20 to 24 27,925 7.2% 34,871 6.8% 42,081 6.6% Age 25 to 29 30,465 7.8% 38,204 7.4% 44,676 7.0% Age 30 to 34 27,667 7.1% 35,541 6.9% 42,778 6.7% Age 35 to 39 26,296 6.7% 33,868 6.6% 42,952 6.7% Age 40 to 44 23,195 5.9% 30,451 5.9% 37,459 5.9% Age 45 to 49 20,556 5.3% 28,678 5.6% 35,363 5.5% Age 50 to 54 21,443 5.5% 29,340 5.7% 36,463 5.7% Age 55 to 59 22,415 5.7% 31,006 6.0% 38,612 6.0% Age 60 to 64 25,899 6.6% 33,786 6.5% 42,990 6.7% Age 65 to 69 19,856 5.1% 27,111 5.3% 32,824 5.1% Age 70 to 74 12,881 3.3% 18,467 3.6% 24,611 3.8% Age 75 to 79 9,536 2.4% 12,549 2.4% 16,520 2.6% Age 80 to 84 7,677 2.0% 10,069 2.0% 12,606 2.0% Age 85 and older 6,547 1.7% 8,682 1.7% 11,992 1.9% Total population all ages 389,914 100.0% 516,042 100.0% 640,218 100.0% Median Age (years) 35.3 35.8 36.4 Source: U.S. Census Bureau, 2019 American Community Survey 1-Year Estimates. Columns may not sum to totals due to rounding. *The Wichita MSA includes Butler, Harvey, Sedgwick and Sumner counties.

Local Industry

Wichita is a manufacturing city with a diverse economic base and growing service sector. More than 640 manufacturing21 establishments are located in the Wichita area, producing a variety of products from computers to aircraft, and these businesses comprise 4.3 percent of all Wichita area businesses.

Approximately 79 percent of all manufacturing establishments are small firms employing fewer than 50 workers, while 11 Wichita area manufacturing establishments employ greater than 500 employees.22 Manufacturing employees comprised 18 percent of total employment in the metropolitan area in 2019, compared to 8.6 percent nationally. Local aircraft manufacturers are among the largest employers in Wichita and combine to produce a significant number of the world's general aviation and commercial aircraft. Service-related firms, particularly regional health care and professional service firms, are also important contributors to Wichita’s long-term growth. Private service sector employment, excluding the trade and transportation sectors, comprised 46.3 percent of total Wichita employment in 2019, and the share grew consistently since the early 2000s as the Wichita economy diversified. These strengths, combined with a skilled labor force and the City's central location, establish Wichita's prominence as a regional market.

21Source: U.S. Department of Commerce, Bureau of the Census, “2018 MSA Business Patterns, NAICS.” 22Source: U.S. Department of Commerce, Bureau of the Census, “2018 MSA Business Patterns, NAICS.” A-7 Largest Detailed Industries by Employment: Wichita Metro Area23

Annual Average Annual Average Percent of Industry 2018 2019 2019 Total Total employment, all industries 292,650 299,044 100.0% Local government 29,929 30,034 10.0% Transportation equipment manufacturing 28,705 (Suppressed Data) (Suppressed Data) Food services and drinking places 24,544 24,930 8.3% Administrative and support services 17,494 18,425 6.2% Ambulatory health care services 14,304 15,005 5.0% Professional and technical services 11,301 11,858 4.0% Specialty trade contractors 10,104 (Suppressed Data) (Suppressed Data) Hospitals 9,557 9,873 3.3% General merchandise stores (Suppressed Data) (Suppressed Data) (Suppressed Data) Social Assistance (Suppressed Data) 7,948 2.7%

Largest Employers Wichita Metro Area24

Company Full-Time Employees Spirit AeroSystems, Inc 9,500 Textron Aviation 9,200 McConnell Air Force Base 6,400 USD 259 Wichita 5,675 Ascension Via Christi Health 3,878 Koch Industries 3,400 Wesley Healthcare 2,954 U.S. Government 2,906 City of Wichita 2,772 Sedgwick County 2,553

Goods-Producing Industries

Aircraft Manufacturing Wichita has a rich history in aviation and one of the highest concentrations of aircraft manufacturing in the world. The local aircraft companies are a diversified mix between military, commercial, and general aviation products and services, which are supported by divisions specializing in research and development, new production, modernization (refurbishing), training, subcontract work, and computer services. In 2018, the Wichita metropolitan area had a location quotient of 50.53 for aircraft manufacturing employment, indicating an aircraft manufacturing cluster in the Wichita area more than 50 times as concentrated as the national average.

Agriculture The South Central Kansas Farm, Crop, and Livestock District, which includes Wichita, lies in the heart of the winter wheat belt. In 2019, Kansas ranked second in the nation in wheat exports, with a value of approximately $955 million, and also exported more than $380 million in corn, ranking as the country’s sixth-largest exporter. The state also ranked third in both beef and veal exports and hides and skins exports with a total value of approximately $1.13 billion. Kansas exported more than $1.4 billion in animal products and almost $3.5 billion in crops, ranking seventh in the nation for overall agricultural exports and among the top ten states in both categories.25 By virtue of being Kansas' largest city and

23Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages, total employment includes private industry and government, by 3-digit NAICS code for industry classification. 24Source: “Largest Employers in the Wichita Area”, Wichita Business Journal, July 2, 2020. 25Source: U.S. Agricultural Exports, Commodity Detail by State, U.S. Department of Agriculture, Economic Research Service. A-8 transportation hub, Wichita plays an important role in the agricultural and agri-related business sector, including being the home of Cargill’s Protein Group headquarters and a number of agricultural implement manufacturers.

Petroleum Wichita is located near the center of the mid-continent petroleum field. Even though the petroleum industry is a small portion of the total economy, Wichita is the headquarters for several companies engaged in oil and natural gas production and industrial oil and grease manufacturing. Koch Industries, one of the largest privately held companies in the United States, performs a variety of petroleum-related manufacturing and transportation activities throughout the world from its Wichita headquarters.

Economic Outlook 26

Introduction27 Following the 2008 recession, employment in Wichita and the rest of the United States experienced moderate growth during the expansion from 2010 to 2019. In 2019, Wichita’s growth accelerated to its fastest level in more than a decade, adding 5,500 new jobs. Job gains were the largest in the service and production sectors, with the manufacturing sector growing at its fastest rate in more than a decade.

For 2020, employment in Wichita is estimated to have contracted in most major sectors, with the manufacturing sector and the leisure and hospitality sector experiencing the largest losses. The novel coronavirus has significantly disrupted normal economic patterns throughout the United States, including locally. Those disruptions are expected to continue into 2021 until the coronavirus vaccine can be fully deployed, which is projected to be in the second or third quarter of the year. Wichita’s manufacturing sector is forecast to continue to struggle into 2021 due to the large concentration of aerospace manufacturers locally, which were challenged with the Boeing 737 Max production freeze in January 2020, followed by the substantial decline in air travel demand due to the virus outbreak. The 737 Max production resumed locally at substantially reduced levels in 2020, but production is not expected to fully resume by the end of 2021. In 2020 Wichita’s employment is estimated to have declined by more than 11,700 workers, a 3.8 percent decline, with the largest losses in the second quarter, followed by recovery in the third and fourth quarters. That recovery is forecast to continue into 2021 with almost 2,200 jobs projected to be added to the local economy. The service sector is expected to grow the fastest, at 1.8 percent, while the trade, transportation, and utilities sector is forecast to grow 1.7 percent. Government employment is projected to remain relatively flat, with a gain of fewer than 100 workers, while the production sectors are expected to continue to contract in 2021 with a 1.7 percent decline.

Economic Indicators

Wichita GDP and Exports

In 2018, real gross domestic product (GDP) grew 1.4 percent for the Wichita metropolitan area, the sixth consecutive year of growth for the area. Since 2013, annual GDP growth averaged 4.1 percent for the area, outpacing the annual average national GDP growth of 2.4 percent during that time. Wichita’s private industries contributed 1.3 percentage points of its 1.4 percent growth in 2019, with the professional and business services sector making the single largest contribution to growth at 0.9 percentage points of overall growth. The agriculture sector and the health care and education sector also grew strongly, each contributing more than 0.25 percentage points to overall growth.

In 2017, Wichita’s real exports totaled $6.2 billion, an increase of $400 million since 2003. Exports comprised 19.9 percent of the total Wichita GDP, the third-highest share of any major metropolitan area in the United States, a sign of Wichita’s interconnectedness with the global economy. Almost 15,000 jobs are directly supported by exports in the Wichita area, along with another almost 19,000 jobs indirectly.28

Retail Sales and Cost of Living

Nominal taxable retail sales in the Wichita area grew 3.5 percent in 2019, increasing upon 2018’s growth of 2.5 percent. In recent years, although taxable retail sales have grown in eight of the last nine years, growth in local retail sales lagged

26Sources: Wichita State University, W. Frank Barton School of Business, Center for Economic Development and Business Research. See their Kansas economic data website at http://www.kansaseconomy.org for the latest economic indicators. 27Throughout this section, unless otherwise noted, the data presented are for the Wichita MSA (Metropolitan Statistical Area). This includes Butler, Harvey, Kingman, Sedgwick and Sumner counties, as the Bureau of Labor Statistics did not adopt the Office of Management and Budget September 2018 update to metropolitan area delineations, which removed Kingman County from the metropolitan area, for its employment data. 28 Brookings Institution, Export Monitor 2018, https://www.brookings.edu/research/export-nation-2018/. A-9 growth in personal income locally, likely due in part to the increasing prevalence of online retail sales, which grew from 4 percent to 10.9 percent of all retail sales nationally from 2009 to 201929. Through August of 2020, Wichita’s nominal retail sales declined 0.1 percent relative to the first eight months of 2019, with April 2020’s retail sales declining the most relative to one year earlier. Sales are forecast to resume growth in 2021 with an increase of 3.3 percent, and above average growth is expected to continue into 2022 as well.

The cost of living index for Wichita for the third quarter of 2020 was 89.4 index points, which was 10.6 percent below the average of the 273 major United States metropolitan areas surveyed and ranked the 69th least expensive metropolitan area to live. Inexpensive housing continued to be the primary reason for Wichita’s modest cost of living, with housing costs 31.6 percent below average, while inexpensive grocery, health care, transportation, and utilities costs also contributed to Wichita’s low cost of living.30

Consumer Confidence and Local Indices

Both nationally and locally, economic indices signaled an improving economy for the past several years prior to the novel coronavirus. Following the 2008 recession, the national Index of Consumer Confidence was on a consistent upward trend from 2010 through 2019. However, the December 2019 index value was 1.5 points lower than one year earlier, indicating some dampening of national consumer confidence prior to the novel coronavirus outbreak. Consumer confidence declined due to the impact of the novel coronavirus, but recovered to 88.6 index points in December 2020, still leaving it more than 38 points lower than December 2019. Similarly, the national University of Michigan Consumer Sentiment Index increased from 2009 to 2018, reaching a peak of 98.4 points in 2018. In 2019 the index declined modestly to an average of 96 index points and remained relatively flat in the early part of 2020 before declining more than 20 points to 71.8 points in April 2020. The index recovered to 81.8 index points by October 2021, but then declined again in November. Prior to the outbreak of the novel coronavirus, conditions were relatively strong. These declines indicate a sharp drop in consumer confidence following the outbreak, and consumer confidence remained low despite some recovery in the rest of 2020.

Locally, the Center for Economic Development and Business Research’s (CEDBR) Wichita Current Index continued to improve prior to the outbreak of the novel coronavirus. The index annual average increased 1.4 index points from 2018 to 2019 due to improvement in the unemployment rate and the largest increase in employment in more than a decade. The February 2020 peak of 99.1 index points was its highest level since November 2008. With the outbreak of the novel coronavirus, the index declined to 87.5 index points in April, followed by a sharp recovery to 95.4 index points in October 2020.31

The CEDBR Wichita Leading Index improved in 2019 to 97.7 index points, an increase of 0.8 points compared to 2018, which indicates the expectation of continued economic growth in the area. The index peaked in February 2020 at 97.9 index points, followed by a decline to 82.7 index points in April 2020 as the novel coronavirus reduced the potential for short-term economic growth. The index recovered quickly in the third quarter, reaching a value of 96.1 index points in November 2020, an indication that Wichita’s near term growth potential is almost as strong for 2021 as it was prior to the coronavirus outbreak.

In the first quarter of 2020, Wichita’s Misery Index declined 0.3 index points compared to one year early to 3.6 index points, an indication of reduced economic misery in the Wichita area. In the second quarter, with the outbreak of the novel coronavirus, Wichita’s index spiked to 12.14 index points, before declining to 8.56 index points in the third quarter, both of which are similar to the changes in the national misery index.

The Misery Index measures the economic misery caused by high housing prices, inflation and unemployment rates, with lower index values indicating less misery caused by these factors. Wichita outperformed the nation on the Misery Index for every year since 2006, reflective of the inexpensive housing and low unemployment in the area. Through the first three quarters of 2020, Wichita’s Misery Index value averaged 0.4 index points less than the national average.

Business Establishment Growth Following the 2008 recession, the number of business establishments in the Wichita MSA declined and reached its post- recession nadir in 2011 with 14,404 establishments. Since 2011, the number of business establishments in the Wichita MSA grew 3.8 percent through 2018. In 2018, the number of business establishments declined 0.5 percent relative to 2017, offsetting 2017’s growth of 0.5 percent. The fastest growth categories were among businesses with 100 to 249 employees

29 Source: U.S. Census Bureau, Quarterly Retail E-Commerce Sales. 30 Source: C2ER, ACCRA Cost of Living Index, 2020 3rd Quarter. 31 Source: CEDBR Local Indices, http://kansaseconomy.org/local-indices A-10 and those with 500 to 999 employees, which grew 1.9 and 23.8 percent, respectively, each adding five or more new business establishments.32

Since 2011, Wichita experienced employment growth among firms of all sizes, with the largest employment growth concentrated in firms with 500 or more employees and firms with 50 to 249 employees, which grew 10 percent and 11.6 percent, respectively, through 2018. Similar to national trends, the majority of Wichita’s employment growth is from firms with over 500 employees. In 2018 alone, Wichita’s firms with more than 500 employees grew 3.8 percent, their fastest growth in a decade.33

Looking at business firms by their age, since 2011 employment growth in Wichita was typically driven by older, established firms that are 11 years old or older, similar to national trends. In 2018, Wichita experienced a large increase in employment at firms aged four or five years, with a smaller decrease in the employment of firms aged two to three years, while firms 11 years or older experienced their fastest growth since 2013.34

Labor Market

Employment After the 2008 recession, the Wichita MSA’s unemployment rate peaked in 2010 at 8.6 percent. From 2010 to 2019, the unemployment rate consistently declined in the Wichita MSA, reaching 3.4 percent in 2019, which was the lowest level of unemployment in the area since 1998. The MSA’s unemployment rate has been lower than the national average since 2006, while the City of Wichita’s rate has been more in line with the national average in recent years. The City of Wichita’s unemployment rate peaked at 9.5 percent in 2010, and it followed a similar pattern, declining consistently over the past eight years to a low of 3.6 percent in 2019. Both the City and MSA experienced sharp increases in their unemployment rates in April 2020 with the outbreak of the novel coronavirus, to 19.2 percent and 17.72 percent, respectively. The unemployment rate declined each month since April in both the City and the MSA before increasing slightly in November to 7.8 percent and 7.2 percent respectively, in line with the declines in the national unemployment rate in that time.

The total civilian labor force in 2019 grew at its fastest rate in more than a decade for the Wichita MSA, reaching 314,973 people. Of that total, 304,277 were employed. In the city of Wichita, the total civilian labor force in 2019 numbered 189,509, with 182,741 employed.

Since 2010, annual new hires increased by 32.7 percent through 2019 as hiring recovered from its recessionary lows, including 2.8 percent growth in 2019. The 2019 growth continued the strong increase in hiring in 2018, which at 6.2 percent growth was the largest increase in hiring since 2008. Following the recession, job destruction at the firm level declined and through 2019 remained near its post-recession low, while job separations and transitions have increased in the area, an indication of a robust and tightening local labor market.35

Wages & Hours Worked Total nominal wages in the Wichita MSA grew, on average, 2 to 3 percent each year from 2011 to 2015 following the recession. After flat wage growth in 2016 and 2017, total wages grew 4.4 percent in 2018 and 4.9 percent in 2019, the fastest annual wage growth in the area since 2007.

The average weekly hours worked in the Wichita area typically exceeded the national average. Private-industry average weekly hours worked of all employees increased 0.5 hours per week in 2018, to 35.3 weekly hours worked and remained flat at 35.3 hours in 2019. In 2020, hours worked grew to 35.7 hours per week in November, an increase of 0.8 hours compared to November 2019. The weekly hours worked by production workers in Wichita’s manufacturing sector averaged 40.5 hours per week in 2019. This was a 1.9 hour per week decline in the sector, which in 2019 added 2,600 new jobs, so the overall number of hours worked increased. In 2020, manufacturing hours increased to 42.1 through November, growth of 0.9 hours compared to November 2019.

32 Source: U.S. Census Bureau, 2017 County Business Patterns. 2018 data was not available at the time of publication. 33 Source: U.S. Census Bureau, 2017 Quarterly Workforce Indicators Data. 2018 data was not available at the time of publication. 34Source: U.S. Census Bureau, 2017 Quarterly Workforce Indicators Data. 2018 data was not available at the time of publication. 35Source: U.S. Census Bureau, 2019 Quarterly Workforce Indicators Data.

A-11 Commuting Patterns In 2019, almost 60,000 workers commuted into the City of Wichita, primarily residents from elsewhere in the Wichita MSA, while approximately 40,000 employed residents of the city commuted out to work outside of the city. This makes the City of Wichita a net importer of labor from the surrounding communities, a sign of Wichita’s status as a regional economic and commercial hub. Approximately 78.6 percent of employed City of Wichita residents worked in the city, while 21.4 percent worked outside of the city, the vast majority of which worked elsewhere in the Wichita MSA. The average travel time to work for Wichita residents was only 19 minutes, considerably shorter than the national average commute time of 27.6 minutes, which is a sign of the ease of travel throughout the city.

Housing and Construction The value of total building permits in Wichita increased each year from 2012 to 2018. The real value of non-residential permits declined 22.9 percent in 2019, following a 12 percent increase in 2018. From 2012 to 2019, the overall value of non-residential permits increased by 300.2 percent. The real value of residential permits increased 12.9 percent in 2019, building upon a 3.2 percent in 2018. Since 2012, residential building permits have increased in real value by 167.4 percent. For 2020, residential permits are estimated to have declined by 1.5 percent, and non-residential permits are estimated to have declined by 11.8 percent, though the total permit level is estimated to still be 35.7 percent higher than its 2016 level. This decline will likely lead to significant pent-up demand that could be realized once the novel coronavirus outbreak subsides, most likely in the later portion of 2021.

Home prices have increased each year in Wichita since 2014, indicating increased demand for housing in the area. Stanley Longhofer, director of the Wichita State University Center for Real Estate, forecasts that growth will continue with increases in home prices of 6.6 percent in 2020 and 5.6 percent in 2021.36 New home construction is estimated to have grown 12.5 percent in 2020, a sharp increase over growth in recent years. The novel coronavirus outbreak has left the market with a limited supply of houses on the market to meet high demand, so prices are expected to increase at an above average rate while sales volume remains relatively steady.

The commercial real estate market continued to have high demand in 2019, but demand softened in 2020 due to the novel coronavirus outbreak. The retail market remained robust as its vacancy rate increased by only 0.1 percentage points from the third quarter of 2019 to the third quarter of 2020. The office market struggled more with the impact of the pandemic, with a 5.5 percentage point increase in its vacancy rate after reaching a multi-year low in the third quarter of 2019.37

In addition to increasing home prices and increasing absorption of new commercial space, major projects are underway to continue revitalizing the downtown area. In May 2019, Fidelity Bank announced a planned $51 million renovation to its downtown Wichita headquarters building to allow for future expansion of the local workforce, with completion expected in 2023. The first phase of the project, a $16 million parking garage, was completed in January 2021. The new $75 million Riverfront Stadium baseball park completed construction in March 2020 in the Delano District will be the anchor for a new $127 million Riverfront Village development next to the stadium, which will include both residential and 500,000 square feet of commercial space. The $30 million second phase of the Union Station renovation was completed in May 2019, which transformed the primary Union Station terminal into 150,000 square feet of office space. The third phase, completed in 2020, will add additional parking and an additional 30,000 square foot building to the complex, with investment after all three phases totaling more than $50 million. A $21 million renovation of the 430 building at Douglas and Emporia was completed in the winter of 2020, adding 75,000 square feet of office and retail space, and construction on a new $12.5 million Home2Suites hotel finished in January 2021.

Along with major commercial and recreational projects, downtown Wichita’s residential offerings continue to expand. A new $29.5 million five-story apartment building is expected to be completed in summer 2021 in the Delano District, adding more than 200 additional residential units to the downtown area. Gateway Apartments, a $40 million, two-building, 226- unit apartment complex, is expected to begin construction in 2021 in downtown Wichita.

The natural resources, mining and construction sector added jobs in seven of the eight years from 2011 to 2019, expanding by 2,100 jobs in that time. In 2019, the sector added approximately 100 jobs, growing 0.6 percent, and employment is estimated to have declined by approximately 700 workers in 2020 due to the novel coronavirus outbreak. The sector is projected to grow 1.5 percent and add more than 200 jobs in 2021 as businesses resume construction plans paused by the outbreak.

36 Longhofer, Stanley, 2020 Kansas Housing Markets Forecast: Wichita Housing Forecast, Center for Real Estate, W. Frank Barton School of Business, Wichita State University. 37Source: NAIMartens, Q32020 Wichita Market Update. A-12 Manufacturing The manufacturing sector is the largest major industry sector in the Wichita economy in terms of both employment and GDP, employing approximately 18 percent of Wichita workers and comprising 29.1 percent of Wichita GDP as of 2019. Approximately 85.1 percent of those workers manufacture durable goods, with aerospace products and parts being the largest component of the durable goods manufactured. Aerospace products and parts jobs represent approximately 54.9 percent of all manufacturing jobs and 10 percent of all jobs in the Wichita area.

The manufacturing sector in the United States lost approximately 1.7 million jobs between 2008 and 2011, for a 12.5 percent decline. During that same period, the Wichita MSA lost 15,300 manufacturing jobs, for a 22.7 percent decline. Since 2011, employment in the non-aerospace portion of Wichita’s manufacturing sector grew 17.8 percent, including 900 new jobs added in 2019. Aerospace employment manufacturing employment increased in Wichita by 1,400 workers in 2018 and 1,700 jobs in 2019, the first significant employment increases in the sub-sector since 2008. Overall, 2018 and 2019 were the strongest growth years for Wichita’s manufacturing sector since 2008, with 2,000 jobs added in 2018 and 2,600 in 2019. This growth was broad-based across manufacturing sub-sectors, with growth in non-durables, aerospace, machinery manufacturing, and non-aerospace durable employment.

While aerospace manufacturing remains the largest single component of manufacturing in Wichita, the area’s manufacturing base diversified in recent years, with increases in employment in both non-durable and non-aerospace durable manufacturing employment since 2010. The machinery manufacturing sector expanded by 29.2 percent from 2010 to 2019, and the non-durable sector has grown 43.9 percent in that time, including 600 new jobs in 2019.

Recent troubles for the national aerospace industry have created uncertainty and challenges in the short term for Wichita area aerospace manufacturers and have substantially clouded their short-term economic outlook. The novel coronavirus outbreak significantly reduced air travel, causing widespread disruptions in throughout the aerospace supply chain as airlines reduced their demand for new aircraft. This came after the Boeing 737 Max production freeze in January 2020 had already caused substantial disruptions in the local aerospace industry, as Spirit AeroSystems, Wichita’s largest private employer, is a major supplier for the production of the 737 Max.

CEDBR’s Aerospace Index, a measure of national conditions in the aerospace manufacturing industry, peaked at 116.4 index points in the first quarter of 2019 and declined to 103.9 index points by the first quarter of 2020, an indication of a decline in the economic conditions of the aerospace industry prior to the novel coronavirus outbreak. In the second quarter, the index declined further to 90.8 index points before rebounding slightly to 92.8 points in the third quarter.

Spirit AeroSystems, announced layoffs in January 2020 and followed with additional rounds of layoffs in May and July 2020, collectively laying off almost 5,000 workers, more than a third of its local workforce, in response to the 737 Max freeze and the ongoing impact of the coronavirus on commercial aerospace demand.38 Spirit restarted 737 Max production in April 2020 at a fraction of the pre-freeze capacity, and, even after the FAA recertification for the 737 Max in November and Boeing resumed delivery of new planes to airlines, production is expected to slowly ramp back up through 2022.39 Spirit previously had increased its employment by approximately 2,500 workers in 2018 and 2019 to meet the high expected demand for the 737 Max.

Textron Aviation also announced 1,050 layoffs for their aerospace division in June and July of 2020, with a majority of the layoffs expected to be in the Wichita area, after the firm hired approximately 2,000 new workers locally in 2018 and 2019. The company received FAA certification in October 2020 on its new Wichita-manufactured turboprop, the Beechcraft King Air 360/360ER and began deliveries of the plane, its new flagship turboprop, in November 2020.40 The first Learjet 75 Liberty, a business jet manufacturing in Wichita by Bombardier, was delivered in October 2020; the Wichita Bombardier plant employs 1,500 workers.

With the disruptions from the 737 Max production freeze and the novel coronavirus outbreak, Wichita’s manufacturing employment is estimated to have declined by approximately 3,900 workers, a 7.1 percent decline. Continued uncertainty and weak demand in the aerospace sector due to coronavirus-related reductions in air travel is expected to delay significant recovery in the sector until 2022. For 2021, manufacturing employment is forecast to contract by 2.7 percent, a decrease by approximately 1,400 workers.

38 McCoy, Daniel. “Spirit AeroSystems announces more Wichita layoffs,” Wichita Business Journal, July 31st, 2020. https://www.bizjournals.com/wichita/news/2020/07/31/spirit-aerosystems-announces-more-wichita-layoffs.html 39 McCoy, Daniel. “Boeing 737 MAX news that’s even more important to Wichita than the ungrounding,” Wichita Business Journal, December 31st, 2020. https://www.bizjournals.com/wichita/news/2020/12/31/boeing-737-max-deliveries.html 40 McCoy, Daniel. “Textron Aviation’s newest King Air enters service,” Wichita Business Journal, November 12th, 2020. https://www.bizjournals.com/wichita/news/2020/11/12/textron-aviation-newest-king-air-enters-service.html A-13 Trade, Transportation, and Utilities Employment declined by 300 jobs in the trade, transportation, and utilities sector in 2019, with a decline in the retail trade sector partially offset by growth in the transportation and utilities sector and wholesale trade sector. Retail declined by 800 jobs while transportation and utilities sector gained 400 jobs and the wholesale trade sector gained 100 jobs in 2019. Despite the decline in retail employment, nominal taxable retail sales increased 3.5 percent in 2019, their fastest increase since 2012, indicating continued growth in Wichita’s retail base. The transportation, warehousing and utilities sector was a bright spot in recent years, adding 1,000 workers since 2012, and, in the fall of 2020, Wichita added a new Amazon distribution center, bringing more than 100 workers to the sector.

Due to the novel coronavirus, retail spending growth was disrupted in the area, with nominal retail spending declining 0.1 percent through the first eight months of the year relative to one year prior. In 2021, spending growth is expected to resume at 3.3 percent. For 2020, trade, transportation, and utilities employment is projected to decline by 2.1 percent, a contraction of approximately 1,000 jobs. Much of the job loss is forecast to be recovered in 2021 as the sector is expected to gain more than 800 jobs. Both the 2020 job losses and the 2021 job gains are projected to be primarily in the retail sector, with smaller changes in wholesale trade and transportation.

Prior to the novel coronavirus outbreak, the city’s retail space and offerings grew, though most retail expansion has been paused during the outbreak. None of the city’s major retail projects have been cancelled despite the impact of outbreak. The largest of these is the $127 million Riverfront Village development in the Delano District, which will add more than 500,000 square feet of retail and other commercial space to the downtown area. This project and others will continue to revitalize Wichita’s downtown retail in the Delano District and the Old Town district.

New developments and shopping centers have added significantly to Wichita’s retail space in recent years. In 2019, the Greenwich Place development added a number of stores, including Duluth Trading Co, Famous Footwear, Michaels, Five Below, and Dave & Busters. A location for REI, the outdoor equipment retailer, opened in August 2020 in the development, and construction began on an Under Armour store in January 2021. In the fall of 2019, Trader Joe’s opened its first Wichita location in the Bradley Fair shopping area. A new Hobby Lobby opened in the Cadillac Lake development in the third quarter of 2019, the first new retail building in that development, and a 7,000 square foot retail center began construction in December 2020 in the area. Gander Outdoors and Camping World opened in the summer of 2019 in south Wichita in the new Steeple Bay mixed-use development. The Waterfront shopping center expanded by 15,000 square feet in 2020, adding room for eight additional tenants.

Information and Other Services The information industry, at both the local and national levels, experienced a long-term downward trend in the 2000s. From 2007 to 2012, the sector declined by 2,500 jobs, approximately 36 percent of its previous employment, and at the national level there was a similar pattern of job losses. Nationally, information employment peaked at 3.6 million jobs in 2000 but declined to 2.7 million by the end of 2011, a 26 percent loss. From 2012 to 2018, the sector has remained relatively flat in Wichita, declining by approximately 300 jobs, followed by an additional 300 jobs in 2019. Due to the novel coronavirus, job losses are estimated to have accelerated in 2020 with an 8.4 percent decline, a decrease of more than 300 jobs. In 2021, the decline is projected to slow to 3.8 percent, with approximately 100 jobs lost.

The other services sector grew by 1,200 jobs from 2014 to 2019 in the Wichita area, with 400 new jobs added in 2019. Due to the novel coronavirus, other services employment is estimated to have declined by more than 200 jobs in 2020, a contraction of 2.3 percent. In 2021 the sector is expected to remain relatively flat, growing 0.2 percent.

Financial Services The financial industry in the Wichita MSA lost 2,400 jobs from 2001 through 2013, an 18 percent employment decline. Since then, the industry has been on a generally upward growth trajectory, adding approximately 1,000 jobs through 2019. In 2020, the sector is projected to decline by fewer than 100 jobs due to the novel coronavirus, and growth in 2021 is expected to be by fewer than 100 jobs.

Professional and Business Services Professional and business services have been one of the fastest-growing sectors in the Wichita area in the past decade, adding 5,300 jobs from 2009 to 2019. The sector added 600 new jobs in 2019, following a growth of 700 jobs in 2018. The professional, scientific and technical services subsector has grown in Wichita every year but one from 2007 to 2018; since 2012, the sub-sector has added 1,900 new jobs to the local area despite a decline of 100 jobs in 2019.

A-14 The professional and business services sector is forecast to grow 0.3 percent in 2020, adding approximately 100 jobs, and decline by fewer than 100 jobs in 2021. Once the coronavirus vaccine is fully distributed, the sector is expected to resume its previous growth pattern, likely beginning in the third or fourth quarter of 2021.

Educational and Health Care Services Education and health care services are one of the largest sectors of the local economy, employing approximately 15.3 percent of the total employed workforce in the local economy. Growth in this sector was primarily driven in recent years by the continued expansion of employment in non-hospital health care facilities such as physicians’ offices and residential care facilities, while education and hospital employment have remained relatively flat, though 2019 brought 3.1 percent growth in the hospital sector as well. While most construction was delayed in 2020 due to the novel coronavirus outbreak, Ascension Via Christi began a $3 million expansion of their OB/GYN clinic at St. Joseph hospital in southeast Wichita in March 2020. The new $75 million Kansas Health Science Center downtown medical campus is expected to open in 2022, which would include renovating five downtown Wichita buildings to become the home of a new college of osteopathic medicine, adding a projected 300 new jobs to the downtown economy.

Continued population growth, along with an aging local population, should keep the demand for health care services high in the longer-term outlook. In the short-term, the impact of the novel coronavirus outbreak has been to reduce overall employment in the health care sector due to a reduction in non-essential services provided, despite the heavy burden put it has put on hospitals. The sector added 1,600 new jobs in 2019, its fastest growth in more than a decade, but health care and education employment is estimated to have declined by more than 300 jobs in 2020, a contraction of 0.7 percent. In 2021, growth is expected to resume, adding more than 1,300 jobs in the sector.

Leisure and Hospitality Services Travel and tourism grew in the Wichita area in 2019, though the sector contracted significantly in 2020 due to the novel coronavirus outbreak. Traffic at Wichita’s Dwight D. Eisenhower National Airport grew 5 percent in 2019, the third consecutive year to set a new record for the highest traffic at the airport. In 2019, transient guest tax receipts for the City of Wichita increased 2.7 percent relative to 2018, a sign of continued expansion in Wichita’s hospitality industry. This marked the third consecutive year of growth in guest tax receipts for the city. Through November, air traffic declined by 45.1 percent in 2020 relative to the first eleven months of 2019, and guest tax receipts declined 38.1 percent in 2020 relative to 2019, with the largest decline in air traffic occurring in April and the largest decline in guest tax revenue occurring in May.

Wichita Riverfest, the largest annual festival in Wichita, had 440,000 attendees over its nine days in 2019, including 75,000 attendees visiting in a single day, the single highest attendance day in the 13 years. Merchandise sales for the event increased 15 percent year-over-year as well, despite a slight drop in overall attendance compared to 2018.41 The 2020 festival was cancelled due to the novel coronavirus.

Leisure and hospitality services added 3,800 jobs from 2013 to 2019 as Wichita’s fastest-growing sector. The bulk of these gains occurred in the food services and drinking places subsector, which added 2,900 jobs in that time. In 2019 the sector added 500 jobs, growing 1.5 percent. The sector was the hardest hit in the Wichita area by the novel coronavirus outbreak as both travel and spending at recreational businesses declined. Employment in the sector is estimated to have decreased by 12.5 percent, with more than 4,100 job losses in 2020. The sector is expected to begin to recover in 2021 and is forecast to grow 4.6 percent, gaining more than 1,300 jobs.

Government The government sector added 200 new jobs in Wichita in 2019, growing 0.5 percent. Employment grew in the federal and state government sectors, which added 200 and 300 jobs, respectively. The local government sector declined by 300 workers, the first contraction in that sector since 2013.

From 2011 to 2019 in Wichita, the local government added 500 jobs, and the state government added 700 jobs, while federal government employment contracted by 900 jobs. CEDBR projects government employment will remain approximately flat in 2020 and 2021, with a collective job loss of less than 0.1 percent. The losses are expected to be concentrated in the local sector, while the state and federal sector are projected to grow modestly each year.

41 “Riverfest 2019 Thrives in Spite of Swollen Arkansas River”, Wichita Festivals, Inc. http://wichitariverfest.com/riverfest_info.php?page=news-media_news, June 9, 2019. A-15

Wichita MSA Forecast Summary

Wichita MSA Employment by Industry Summary* 2020-2021 2020-2021 Level Percent 2019 (a) 2020 (e) 2021 (f) Change Change

Total Nonfarm 305,027 293,304 295,492 2,188 0.7% Production Sectors 71,671 67,052 65,912 -1,140 -1.7% Natural Resources, Mining & Cons. 16,672 15,956 16,198 242 1.5% Manufacturing 54,999 51,097 49,715 -1,382 -2.7% Durable Goods 46,816 42,896 41,452 -1,444 -3.4% Non-Durable Goods 8,183 8,200 8,262 62 0.8% Trade, Transportation & Utilities 50,354 49,289 50,110 821 1.7% Wholesale Trade 8,758 8,403 8,259 -144 -1.7% Retail Trade 31,562 30,683 31,406 723 2.4% Transportation & Utilities 10,034 10,203 10,445 242 2.4% Service Sectors 141,237 136,229 138,711 2,482 1.8% Information 3,908 3,578 3,444 -134 -3.8% Financial Activities 11,664 11,595 11,609 14 0.1% Professional & Business Services 35,266 35,371 35,294 -77 -0.2% Education & Health Services 46,549 46,221 47,545 1,324 2.9% Leisure & Hospitality 33,089 28,951 30,280 1,329 4.6% Other Services 10,761 10,514 10,539 25 0.2% Government 41,765 40,734 40,759 25 0.1% *Annual values are derived from average quarterly observations and projections. (a) actual (e) estimated (f) forecasted

A-16

APPENDIX B

FINANCIAL INFORMATION

(THIS PAGE INTENTIONALLY LEFT BLANK) Wichita Water & Sewer Utilities Director’s Office City Hall – Eighth Floor 455 North Main Street Wichita, Kansas 67202

June 26, 2020

To our Water and Sewer Bondholders:

Please review and accept the 2019 Annual Report, presented on behalf of the City of Wichita and the Water and Sewer Utilities.

The City of Wichita is committed to providing top‐quality, reliable water and sewer service to residents of Wichita and the surrounding communities. More than 450,000 citizens of southcentral Kansas are served by the Wichita Water Utility. Wichita’s utility system is comprised of over 4,400 miles of water and sewer mains, 67 sanitary sewer lift stations, four wastewater treatment plants, one drinking water treatment plant, one surface water treatment plant, about 150,000 water meters and numerous other assets. Through efficient operations and strategic financial management, the Utilities will continue to provide high value services to all customers.

In 2018, the Utility was invited to apply for Water Infrastructure Finance and Innovation Act (WIFIA) and State Revolving Fund (SRF) financing for a new water treatment plant. Design work and application development progressed throughout 2019. Final design and site preparations began in January 2020 and are expected to continue through fall 2020. The City’s WIFIA credit agreement was approved in April 2020, after which negotiations of the SRF credit terms began. The SRF loan is expected to close by the end of September 2020. The City expects construction of the new plant to begin in fall 2020 and be completed approximately four years later. While incremental rate adjustments are expected over the next several years to pay for the new treatment plant, the favorable financing terms of the WIFIA and SRF programs will help minimize the impact to ratepayers and keep Wichita’s utility services affordable.

The City also has a second major project on the horizon driven by regulatory changes in Biological Nutrient Removal (BNR) standards. In‐depth planning for the BNR project is currently underway. Preliminary design work and work on a WIFIA letter of intent is expected to begin in summer 2020. The project is included in the City’s Capital Improvement Program.

While capital improvements, especially the new treatment plant, dominated the spotlight this year, the Utilities also achieved a number of operational successes throughout 2019. The Utilities Optimization Program completed a comprehensive analysis and revision of over 100 incidental user fees to ensure full cost recovery. The Utilities were made more accessible to customers through an overhauled web portal

B-1 B-2 CITY OF WICHITA, KANSAS

WATER UTILITIES COMBINED STATEMENT OF NET POSITION

For the year ended December 31, 2019 (with comparative totals for the year ended December 31, 2018)

2019 2018 ASSETS Current assets: Cash and cash equivalents $ 54,399,144 $ 51,329,898 Receivables, net: Accounts receivable 18,582,551 22,428,784 Inventories 3,079,992 2,497,949 Prepaid items 744,209 777,595 Restricted assets: Cash and cash equivalents 37,280,901 35,292,023 Total current assets 114,086,797 112,326,249

Noncurrent assets: Restricted assets: Cash and cash equivalents 116,316,355 89,652,835 Capital assets: Land 14,823,085 14,796,039 Buildings 256,350,867 256,196,268 Improvements other than buildings 1,183,999,544 1,164,622,354 Machinery, equipment and other assets 180,744,402 177,019,705 Construction in progress 126,090,649 92,695,082 Less accumulated depreciation (553,486,646) (517,000,311) Total capital assets, net 1,208,521,901 1,188,329,137 Total noncurrent assets 1,324,838,256 1,277,981,972

Total assets 1,438,925,053 1,390,308,221

DEFERRED OUTFLOWS OF RESOURCES Unamortized refunding costs 13,201,311 16,929,259 Deferred outflows related to pensions 18,422,596 5,398,874 Deferred outflows related to OPEB 399,704 132,096 Total deferred outflows of resources 32,023,611 22,460,229

(Continued)

B-3 CITY OF WICHITA, KANSAS

WATER UTILITIES COMBINED STATEMENT OF NET POSITION (CONTINUED)

For the year ended December 31, 2019 (with comparative totals for the year ended December 31, 2018)

2019 2018 LIABILITIES Current liabilities: Accounts payable and other liabilities $ 8,047,388 $ 5,610,944 Accrued interest payable 284,402 324,060 Deposits 4,360,747 4,460,649 Current portion of long-term obligations: General obligation bonds payable 5,400,000 5,140,000 Compensated absences 708,897 734,969 Current liabilities payable from restricted assets: Accrued interest payable 4,110,901 4,477,023 Revenue bonds payable 27,770,000 25,675,000 Total current liabilities 50,682,335 46,422,645

Noncurrent liabilities: General obligation bonds payable 114,014,775 120,018,574 Revenue bonds payable 426,523,456 413,439,567 Net pension liability 19,745,876 1,687,980 Total other post-employment benefits (OPEB) liability 3,131,416 3,281,778 Compensated absences 110,302 110,692 Total noncurrent liabilities 563,525,825 538,538,591

Total liabilities 614,208,160 584,961,236

DEFERRED INFLOWS OF RESOURCES Unamortized refunding costs 875,823 - Deferred inflows related to pensions 5,694,079 7,540,376 Deferred inflows related to OPEB 741,829 211,292 Total deferred inflows of resources 7,311,731 7,751,668

NET POSITION Net investment in capital assets 644,573,011 644,373,306 Restricted for: Capital projects 1,470,397 739,229 Revenue bond covenants 145,733,482 113,162,615 Unrestricted 57,651,883 61,780,396 Total net position $ 849,428,773 $ 820,055,546

B-4 CITY OF WICHITA, KANSAS

WATER UTILITIES COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

For the year ended December 31, 2019 (with comparative totals for the year ended December 31, 2018)

2019 2018 OPERATING REVENUES Charges for services and sales $ 150,063,138 $ 149,598,945 Fees 770,561 692,791 Rentals 60,628 57,761 Other operating revenues 1,143,488 902,299 Total operating revenues 152,037,815 151,251,796

OPERATING EXPENSES Personnel services 25,912,330 21,816,715 Contractual services 23,093,274 21,783,892 Materials and supplies 8,763,645 9,208,204 Other operating expenses 8,512,606 8,450,977 Administrative charges 1,008,360 1,042,117 Payments in lieu of franchise taxes 7,400,140 6,908,701 Depreciation 36,569,305 38,088,283 Total operating expenses 111,259,660 107,298,889

Operating income 40,778,155 43,952,907

NON-OPERATING REVENUES (EXPENSES) Interest and investment earnings 1,207,094 928,825 Other expenses (1,769,307) (966,515) Interest expense (22,193,866) (22,223,917) Gain on sale of assets 266,543 212,349 Bond premium amortization 3,636,546 2,810,013 Total non-operating expenses (18,852,990) (19,239,245)

Income before contributions and transfers 21,925,165 24,713,662

Capital contributions and transfers Capital contributions 7,448,062 8,303,923 Total capital contributions and transfers 7,448,062 8,303,923

Change in net position 29,373,227 33,017,585

Net position - beginning 820,055,546 787,037,961

Net position - ending $ 849,428,773 $ 820,055,546

B-5 CITY OF WICHITA, KANSAS

WATER UTILITIES COMBINED STATEMENT OF CASH FLOWS

For the year ended December 31, 2019 (with comparative totals for the year ended December 31, 2018)

2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 154,474,924 $ 150,823,936 Cash payments to suppliers for goods and services (42,122,585) (41,252,235) Cash payments to employees for services (22,552,367) (21,760,749) Payments in lieu of franchise taxes (7,400,140) (6,908,701) Other operating revenues 1,143,488 902,299 Net cash provided by operating activities 83,543,320 81,804,550

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Issuance of capital debt 94,375,000 - Premiums on bonds sold 4,798,187 - Accrued interest on bonds sold 8,319 - Bond issuance costs paid (1,067,895) - Debt service - principal refunded (49,240,000) - Debt service - interest placed in escrow on refunded debt (2,585,619) - Principal payments on long-term debt (30,815,000) (33,150,000) Interest payments on long-term debt (22,293,043) (22,351,272) Additions to property, plant and equipment (50,231,985) (61,527,784) Proceeds from sale of capital assets 266,543 421,505 Capital contributions 3,765,042 4,081,844 Net cash used in capital and related financing activities (53,020,451) (112,525,707)

CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 1,198,775 928,825 Net cash provided by investing activities 1,198,775 928,825

Net increase (decrease) in cash and temporary investments 31,721,644 (29,792,332)

Cash and temporary investments - beginning 176,274,756 206,067,088 Cash and temporary investments - ending $ 207,996,400 $ 176,274,756

B-6 CITY OF WICHITA, KANSAS

WATER UTILITIES COMBINED STATEMENT OF CASH FLOWS (CONTINUED)

For the year ended December 31, 2019 (with comparative totals for the year ended December 31, 2018)

2019 2018 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income $ 40,778,155 $ 43,952,907

Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 36,569,305 38,088,283 Other revenues (expenses) (126,076) (70,918)

Changes in assets and liabilities: (Increase) decrease in accounts receivable 3,846,233 516,637 (Increase) decrease in inventory (582,043) (239,742) (Increase) decrease in prepaid items 33,386 35,776 (Increase) decrease in deferred outflows related to pensions (13,023,722) 1,855,116 (Increase) decrease in deferred outflows related to OPEB (267,608) (132,096) Increase (decrease) in accounts payable (110,062) (497,341) Increase (decrease) in accrued interest payable (39,658) 32,152 Increase (decrease) in deposits (99,902) (3,432) Increase (decrease) in net pension liability 18,057,896 (7,782,919) Increase (decrease) in total OPEB liability (150,362) (27,254) Increase (decrease) in compensated absences (26,462) 3,787 Increase (decrease) in deferred inflows related to pensions (1,846,297) 5,862,302 Increase (decrease) in deferred inflows related to OPEB 530,537 211,292 Total adjustments 42,765,165 37,851,643

Net cash provided by operating activities $ 83,543,320 $ 81,804,550

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

Contribution of capital assets $ 3,683,020 $ 4,222,079 Capital assets in accounts payable 5,724,446 -

B-7 City of Wichita, Kansas Notes for the Water Utilities

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Wichita is a municipal corporation governed by an elected mayor and six-member council. The accompanying combined financial statements represent the proprietary Water Utility and Sewer Utility Funds of the municipal government. The Water Utility Fund accounts for the operation and maintenance of the water supply component of the combined Utility. The Sewer Utility Fund accounts for the operation and maintenance of the sewer component of the combined Utility, including wastewater treatment plants and the sewer mains and laterals. B. Measurement Focus, Basis of Accounting and Financial Statement Presentation The Water and Sewer Utility (Utilities) Fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Operating revenues and expenses are distinguished from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the Utilities’ principal ongoing operations. Principal operating revenues of the Utilities are charges to customers for sales and services and the portion of tap fees intended for recovery of connecting new customers to the system. Operating expenses of the Utilities include the cost of sales and services, administration expenses and depreciation on capital assets. Revenues and expenses not meeting these criteria are reported as non-operating revenues and expenses. Consistent with GASB Statement 33, Accounting and Financial Reporting for Nonexchange Transactions, capital contributions resulting from non-exchange transactions are included in non-operating revenues. C. Cash and Investments Cash resources of the individual funds are combined to form a pool of cash and temporary investments, which is managed by the Director of Finance (except for investments of the pension trust funds). Information on the pooled cash and investments of the City is provided in Note 5 - Cash, Investments and Securities Lending of the Notes to the Financial Statements in the Financial Section of this publication. D. Revenue Recognition The Utilities recognize revenue on sales when services are rendered. All users, including other City departments, are charged for services provided. Accounts receivable represent uncollected charges (both billed and unbilled) as of December 31st, net of amounts estimated to be uncollectible. E. Inventories Inventories are stated at the lower of cost or market, cost being determined by the average unit cost method for both the Water Utility and Sewer Utility. F. Capital Assets Capital assets are valued at historical cost or estimated historical cost (if actual historical cost is not available). Donated capital assets are valued at their estimated acquisition value Estimated on the date donated. The cost of normal maintenance and Asset Classifications Useful Life repairs that do not add to the value of the asset or materially Buildings and improvements 1-100 years extend the life of an asset are not capitalized. Improvements other than buildings 1-85 years Depreciation of all exhaustible capital assets, including the Equipment 1-33 years depreciation of capital leased assets, is charged as an Vehicles 1-20 years expense against operations. Accumulated depreciation is Water/Sewer mains & drainage 75-85 years reported on the funds’ statement of net position. Capital assets of the Utilities are depreciated using the straight line method over the estimated useful lives shown in the chart above.

B-8 City of Wichita, Kansas Notes for the Water Utilities

G. Payments In Lieu of Franchise Taxes Annually, the Water Utility and Sewer Utility pay to the General Fund of the City amounts in lieu of franchise taxes in an amount not to exceed 5% of gross revenues for the preceding year, which is appropriated by the City and included in the annual budget. The combined Utilities payments in lieu of franchise taxes totaled $7,400,140 in 2019 and $6,908,701 in 2018. These payments are treated as an operating expense and passed through to the Utilities’ customers. H. Compensated Absences The City’s policy is to permit employees to accumulate earned but unused vacation and sick pay benefits. Vacation pay is accrued and accumulated vacation is recorded as a liability in the financial statements. The City does not have a policy to pay accumulated sick pay benefits upon termination of employment; consequently, there is no liability for unpaid accumulated sick leave. I. Deferred Outflows and Inflows of Resources In addition to assets, the statement of financial position may report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to future periods and will not be recognized as an outflow of resources (expense/expenditure) until then. The Utilities report deferred charges on refunding in the statement of net position. The deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. The amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The Utilities also report a collective deferred outflow of resources related to pensions, which is described in more detail in Note 7 - Retirement Funds and a collective deferred outflow of resources related to OPEB, which is described in more detail in Note 8 – Other Post-Employment Healthcare Benefits. In addition to liabilities, the statement of financial position may report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The Utilities report deferred charges on refunding in the statement of net position. The deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. The amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The Utilities report a collective deferred inflow of resources related to pensions, which is described in more detail in Note 7 - Retirement Funds and a collective deferred inflow of resources related to OPEB, which is described in more detail in Note 8 – Other Post-Employment Healthcare Benefits.

2. CASH AND INVESTMENTS At December 31, 2019 and 2018, the combined cash and temporary investments in the amounts of $207,996,400 and $176,274,756 respectively, are included in the City’s pooled cash and temporary investments. The City of Wichita has adopted a formal investment policy. The primary objectives of the investment activities are, in priority order: safety, liquidity and yield. The standard of care to be used by investment officials shall be the “prudent investor rule” as set forth in the Uniform Prudent Investors Act K.S.A. 58-24a01 et seq. and shall be applied in the context of managing an overall portfolio. Additional information on the City’s investment policy and the pooled investments of the City is located in Note 5 - Cash, Investments and Securities Lending of the Notes to the Financial Statements in the Financial Section of this publication. On December 31, 2019, revenue bond proceeds for debt service reserve funds of the Water and Sewer Utility were invested as follows:

Percent of Modified Duration Bond Proceeds Investment Type Fair Value (years) Investments U.S. Treasury securities $ 15,123,758 0.079 100.0% Total value $ 15,123,758 100.0% Total weighted average maturity 0.079

B-9 City of Wichita, Kansas Notes for the Water Utilities

The fair value measurements for the Water and Sewer Utilities revenue bond reserve investments on December 31, 2019 are classified as Level 1 of the fair value hierarchy and are valued using quoted prices in active markets for identical securities. The Series 2017A revenue refunding bonds also had advanced proceeds for two specific major sewer projects. As of December 31, 2019, $41,440,005 is being held in an individual account in the Kansas Municipal Investment Pool. As of December 31, 2019, $3,752,873 of these funds are unspent proceeds and interest earnings on the unspent proceeds which are restricted by bond covenants to be spent on the two specific major sewer projects.

3. CAPITAL ASSETS Capital asset activity of the Water Utility and Sewer Utility for the year ended December 31, 2019 is shown as follows (expressed in thousands of dollars): Beginning Ending Balance Increases Decreases Transfers Balance Capital assets, not being depreciated: Land $ 14,796 $ 27 $ - $ - $ 14,823 Construction in progress 92,695 48,573 (15,177) - 126,091 Total capital assets, not being depreciated 107,491 48,600 (15,177) - 140,914 Capital assets, being depreciated: Buildings 256,196 156 (1) - 256,351 Improvements other than buildings 1,164,622 16,327 (1) 3,052 1,184,000 Machinery, equipment and other assets 177,020 3,772 (154) 106 180,744 Total capital assets being depreciated 1,597,838 20,255 (156) 3,158 1,621,095 Less accumulated depreciation for: Buildings (97,243) (5,577) - - (102,820) Improvements other than buildings (304,826) (19,868) - - (324,694) Machinery, equipment and other assets (114,931) (11,124) 117 (35) (125,973) Total accumulated depreciation (517,000) (36,569) 117 (35) (553,487) Total capital assets, being depreciated, net 1,080,838 (16,314) (39) 3,123 1,067,608 Water and Sewer Utility capital assets, net $ 1,188,329 $ 32,286 $ (15,216) $ 3,123 $ 1,208,522

Interest costs incurred to bring certain assets to the condition and location necessary for their intended use are capitalized as part of the historical cost of acquiring the assets. During 2019 and 2018, total interest cost of the combined Water and Sewer Utility Fund was $22,193,866 and $22,223,917, respectively, of which $1,001,972 and $1,075,308, respectively, were capitalized.

4. RETIREMENT FUNDS The reporting entity contributes to a defined single-employer retirement benefit plan, the Wichita Employees' Retirement System (WERS) and a single-employer defined contribution plan, the Wichita Employees' Retirement System Plan 3b. Both plans are governed by the Wichita Employees' Retirement System Board of Trustees. All full-time employees of the Utilities participate in one of the retirement plans. Additional information on the retirement systems is reported in Note 7 - Retirement Funds of the Notes to the Financials Statements located in the Financial Section of this publication. The Wichita Retirement Systems also issue a publicly available Comprehensive Annual Financial Report (CAFR) that includes financial statements and required supplementary information for WERS. The financial report may be obtained by writing to the Wichita Retirement System, City Hall, 12th Floor, 455 N. Main, Wichita, KS 67202 or online at https://www.wichita.gov/Finance/Pages/Pension.aspx. The Utilities are required to contribute at an actuarially determined rate for WERS. The rate for 2019 was 12.1% of annual covered payroll. As of December 31, 2019, the Utilities reported a net pension liability of $19,745,876 and also recorded the related deferred outflows of resources and inflows of resources related to their portion of the net pension liability.

B-10 City of Wichita, Kansas Notes for the Water Utilities

5. OTHER POST-EMPLOYMENT HEALTHCARE BENEFITS (OPEB) Kansas statute provides that post employment healthcare benefits be extended to retired employees who have met age and/or service eligibility requirements until the individuals become eligible for Medicare coverage at age 65. The health insurance benefit provides the same coverage for retirees and their dependents as for active employees and their dependents. The benefit is available for selection at retirement and is extended to retirees and their dependents until the individuals become eligible for Medicare at age 65. The accounting for the health insurance for retirees is included in the City’s Self Insurance Fund, with the subsidy provided from the Self Insurance Fund. Separate audited financial statements are not prepared by the Plan. Additional information on the other post employment health care benefits is reported in Note 8 – Other Post-Employment Healthcare Benefits, located in the Financial Section, Notes to the Financial Statements of this publication.

As of December 31, 2019, the Utilities reported a total OPEB liability of $3,131,416 and have recorded the related deferred outflows of resources and inflows of resources related to their portion of the total OPEB liability.

6. SELF INSURANCE FUND AND INSURANCE COVERAGE The City established a Self Insurance Fund in 1987 to account for self insurance programs of workers' compensation, group life insurance, employee liability, property damage, auto liability and general liability for the reporting entity. The Utilities participate in the self insurance programs of workers' compensation, group life insurance, group health insurance, employee liability, property damage, auto liability and general liability. Property insurance for the Utilities is included in the City’s coverage with limits established for the entire City. Information on the insurance programs is located in Note 9 - Self Insurance Fund of the Notes to the Financial Statements located in the Financial Section of this publication. Details of purchased insurance coverage are provided within the Additional Information Section of this report on page F-7 of this publication.

7. LONG-TERM DEBT A. Revenue Bonds Revenue bonds are issued by the City of Wichita where income derived from the acquired or constructed assets is pledged to pay debt service. The bonds are payable solely from net revenues of the Utilities. Revenue bonds of the combined Utilities outstanding at December 31, 2019 are as follows (expressed in thousands of dollars):

Final Amount Outstanding issue Interest Rate Dated Date Maturity Date Outstanding 2010B Water & Sewer 4.00% - 5.35% 10/15/2010 2020* $ 795 2011A Water & Sewer Refunding 5.00% 11/01/2011 2021* 15,590 2012A Water & Sewer 3.00% - 4.00% 05/01/2012 2032 12,060 2014A Water & Sewer Refunding 3.00% - 5.00% 08/01/2014 2030 22,620 2014B Water & Sewer 2.50% - 5.00% 12/01/2014 2034 10,400 2015B Water & Sewer Refunding 2.38% - 5.00% 04/01/2015 2031 28,625 2015C Water & Sewer 2.50% - 5.00% 11/01/2015 2035 20,750 2015D Water & Sewer Refunding 2.50% - 5.00% 11/01/2015 2032 19,165 2016A Water & Sewer 3.00% - 5.00% 08/01/2016 2036 21,355 2016B Water & Sewer Refunding 3.00% - 5.00% 08/01/2016 2039 91,755 2017A Water & Sewer 3.00% - 5.00% 06/01/2017 2037 61,115 2017B Water & Sewer Refunding 3.00% - 5.00% 12/01/2017 2030 19,355 2019A Water & Sewer 3.00% - 5.00% 03/01/2019 2039 44,465 2019B Water & Sewer Refunding 3.00% 12/01/2019 2030 49,910 Total Water & Sewer Utility $ 417,960 * Represents final maturity date of non-refunded portion of issuance.

B-11 City of Wichita, Kansas Notes for the Water Utilities

Changes in the long-term liability of the Water and Sewer Utility for the combined Utilities for the year ended December 31, 2019 are summarized in the following table (expressed in thousands of dollars):

Beginning Ending Due Within Balance Additions Reductions Balance One Year Bonds payable: General obligation bonds $ 115,850 $ - $ (5,140) $ 110,710 $ 5,400 Unamortized premium 9,309 - (604) 8,705 - Revenue bonds 398,500 94,375 (74,915) 417,960 27,770 Unamortized premium 40,614 4,798 (9,079) 36,333 - Total bonds payable 564,273 99,173 (89,738) 573,708 33,170 Compensated absences 846 2,052 (2,079) 819 709 Total long-term liabilities $ 565,119 $ 101,225 $ (91,817) $ 574,527 $ 33,879

Annual debt service requirements to maturity are as follows (expressed in thousands of dollars): Annual Debt Service Requirements Water and Sewer Utility Bonds (dollars in thousands) Year Ending Revenue Bonds General Obligation Bonds December 31 Principal Interest Principal Interest 2020 $ 27,770 $ 15,737 $ 5,400 $ 4,230 2021 29,080 14,650 5,670 3,954 2022 30,330 13,235 5,950 3,663 2023 31,555 11,932 6,250 3,358 2024 27,300 10,608 6,560 3,038 2025 – 2029 137,835 35,967 37,155 11,037 2030 – 2034 94,205 14,868 43,725 4,275 2035 – 2039 39,885 3,323 - -

Total debt service $ 417,960 $ 120,320 $ 110,710 $ 33,555

B. Revenue Bond Ordinance Provisions and Reserve Requirements Revenue bond ordinances related to the issuance of revenue bonds provide for specific deposits to debt service and other related bond reserve and maintenance accounts. At December 31, 2019 and 2018, unrestricted cash available in accordance with the revenue requirements of the bond covenants was $54,399,144 and $51,329,897, respectively.

Water and Sewer Utility Restricted Cash 2019 2018 Principal and interest $ 15,283,492 $ 14,857,097 Bond reserve 15,986,694 16,367,304 Depreciation and replacement 14,869,786 13,332,752 Payment to the City 7,991,040 637,613 Improvements 95,713,371 72,444,872 Unspent bond proceeds 3,752,873 7,305,220 Total restricted cash $ 153,597,256 $ 124,944,858

At December 31, 2019, the City was in compliance with the reserve requirements of the respective Water and Sewer Utility revenue bond covenants. Significant requirements are listed on the next page.

B-12 City of Wichita, Kansas Notes for the Water Utilities

Unrestricted cash: In addition to any cash remaining after satisfying all other restriction requirements, the amount budgeted for ensuing 60 days operating expenses for utility operation, repairs and maintenance. Principal and interest: Principal and interest, an equal prorated portion of the next annual principal payment and semi- annual interest payment of various revenue bond series on the first day of each month, which is sufficient to meet the maturing bond and interest requirements. Bond reserve: A sum equal to greater of the amount of interest which shall become due and payable on various revenue bond series during next fiscal year or the maximum amount of interest which shall become due and payable on various revenue bond series in any subsequent year, shall be used solely for the payment of principal and interest on revenue bond series for which funds might not otherwise be available, or to pay a like amount of final maturing series. Depreciation and replacement: 15% of the operating revenues of the preceding year are accumulated for the purpose of extraordinary maintenance and repairs, capital improvements and if other funds are not available, for the cost of operating and maintaining the Utilities. Improvements: The amount remaining in the Revenue Fund on each January 1, which shall not be required for the operation and maintenance of the Utility or for the transfers required to the above accounts for a period of 90 days, shall be credited to the account. Funds may be used for (1) operational and maintenance expenses of the Utility; (2) increase amounts in any of the other accounts to cover potential deficiencies; (3) improvements, repairs or extensions of the utility; (4) redemption of bonds issued under provisions of the ordinance prior to maturity; or (5) to make transfers to the Revenue Fund. Payment to the City: Proportionate monthly amounts equal to the next required Payment to the City are deposited into the account.

8. LEASES The Sewer Utility and the Airport Authority entered into a 50-year operating lease for land which requires an annual rent payment. The following table provides future minimum rentals of the non-cancelable operating lease.

Minimum Rentals of Non-cancelable Year Ending December 31 Operating Lease 2020 $ 51,396 2021 51,396 2022 51,396 2023 53,960 2024 53,960 2025 – 2029 275,212 2030 – 2034 288,973 2035 – 2039 303,368 2040 – 2044 318,517 2045 -- 2049 334,441 2050 -- thereafter 586,949 Total minimum future $ 2,369,568 tl

9. SEGMENT INFORMATION The Utility maintains separate funds for water and sewer services. Segment information for the year ended December 31, 2019 is located in the Financial Section of this publication.

B-13

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APPENDIX C

SUMMARY OF FINANCING DOCUMENTS

(THIS PAGE INTENTIONALLY LEFT BLANK) APPENDIX C

SUMMARY OF FINANCING DOCUMENTS

The following is a summary of certain provisions and covenants contained in the Series 2021A Bond Resolution, and the Disclosure Undertaking. In certain situations, the summary also summarizes the provisions of the Parity Resolutions. Such summary does not purport to be complete and is qualified in its entirety by reference to the foregoing documents.

THE BOND RESOLUTION

DEFINITIONS

In addition to words and terms defined elsewhere in this Official Statement, the following words and terms as used herein shall have the following meanings:

“Act” means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-620 et seq., and K.S.A. 10-1201 et seq., as amended by Charter Ordinance No. 211, all as amended and supplemented from time to time.

“Additional Bonds” means any bonds secured by the Gross Revenues hereafter issued pursuant to the Bond Resolution; provided that any General Obligation Indebtedness shall not constitute Additional Bonds.

“Additional Indebtedness” means, collectively, Additional Bonds and Additional Obligations.

“Additional Obligations” means any leases or other obligations of the Issuer payable from the Gross Revenues, other than the Bonds.

“AGM” means Assured Guaranty Municipal Corp., a New York domiciled financial guaranty insurance company, or any successor thereto.

“Annual Budget” shall mean with respect to the Utility, the Issuer’s budget of estimated receipts and expenditures on account of all Funds and Accounts created under the provisions of the Bond Resolution, including a budget of Current Expenses, for any Fiscal Year and adopted pursuant to the provisions of the Bond Resolution.

“Authorized Denomination” means $5,000 or any integral multiples thereof.

“Authorized Investments” shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative:

(a) investments authorized by K.S.A. 12-1675 and amendments thereto;

(b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and amendments thereto;

(c) direct obligations of the United States Government or any agency thereof;

(d) the Issuer's temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto;

(e) interest-bearing time deposits in commercial banks or trust companies located in the county or counties in which the Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by securities described in (c);

(f) obligations of the federal national mortgage association, federal home loan banks or the federal home loan mortgage corporation;

(g) repurchase agreements for securities described in (c) or (f);

(h) investment agreements or other obligations of a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's or Standard & Poor's;

(i) investments and shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities described in (c) or (f); C-1 (j) receipts evidencing ownership interests in securities or portions thereof described in (c) or (f);

(k) municipal bonds or other obligations issued by any municipality of the State as defined in K.S.A. 10-1101 which are general obligations of the municipality issuing the same;

(l) bonds of any municipality of the State as defined in K.S.A. 10-1101 which have been refunded in advance of their maturity and are fully secured as to payment of principal and interest thereon by deposit in trust, under escrow agreement with a bank, of securities described in (c) or (f); or

(m) other investment obligations authorized by the laws of the State and approved in writing by the Bond Insurer, all as may be further restricted or modified by amendments to applicable State law.

“Balloon Indebtedness” means Long-Term Indebtedness, 25% or more of the original principal amount of which becomes due (either by maturity or mandatory redemption) during any consecutive twelve-month period, if such principal amount becoming due is not required to be amortized below such percentage by mandatory redemption or prepayment prior to such twelve-month period.

“BAM” means Build America Mutual Assurance Company, a New York domiciled mutual insurance corporation, or any successor thereto.

“Beneficial Owner” of Bonds includes any Owner of Bonds and any other Person who, directly or indirectly has the investment power with respect to any such Bonds.

“Bond Counsel” means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the Issuer.

“Bond Insurance Policy” means: (a) with respect to the Series 2017A Bonds, the municipal bond insurance policy issued by AGM with respect to the Insured Series 2017A Bonds guaranteeing the scheduled payment when due of the principal of and interest on the Insured Series 2017A Bonds; (b) with respect to the Series 2019A Bonds, the municipal bond insurance policy issued by BAM with respect to the Insured Series 2019A Bonds guaranteeing the scheduled payment when due of the principal of and interest on the Insured Series 2019A Bonds; (c) with respect to the Series 2020A Bonds, the municipal bond insurance policy issued by BAM with respect to the Series 2020A Bonds guaranteeing the scheduled payment when due of the principal of and interest on the Series 2020A Bonds; and (d) the municipal bond insurance policy or financial guaranty insurance policy issued by the Bond Insurer concurrently with the delivery of any other Utility Indebtedness guaranteeing the scheduled payment when due of the principal of and interest on such Utility Indebtedness.

“Bond Insurer” means: (a) with respect to the Insured Series 2017A Bonds, AGM; (b) with respect to the Insured Series 2019A Bonds, BAM; (c) with respect to the Series 2020A Bonds, BAM; and (d) the entity set forth in the supplemental resolution authorizing any other Additional Indebtedness.

“Bond Payment Date” means any date on which principal of or interest on any Bond is payable.

“Bond Register” means the books for the registration, transfer and exchange of Bonds kept at the office of the Bond Registrar.

“Bond Registrar” means: (a) with respect to the Series 2021A Bonds, the State Treasurer, and its successors and assigns; and (b) with respect to Additional Bonds, the entity designated as Bond Registrar in the supplemental resolution authorizing such Additional Bonds.

“Bond Reserve Account” means the Water and Sewer Utility Bond Service Reserve Account.

“Bond Reserve Requirement” means, collectively, the bond reserve requirement for each series of Outstanding Parity Bonds, the Series 2021A Bond Reserve Requirement and any bond reserve requirement for any subsequent series of Parity Bonds.

“Bond Resolution” means collectively the Outstanding Parity Bond Resolutions, the Series 2021A Bond Resolution and any supplemental resolution authorizing any Additional Indebtedness.

“Bonds” means, collectively, Outstanding Parity Bonds, the Series 2021A Bonds and any Additional Bonds.

C-2 “Business Day” means a day other than a Saturday, Sunday or any day designated as a holiday by the Congress of the United States or by the Legislature of the State and on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations.

“Cede & Co.” means Cede & Co., as nominee of DTC and any successor nominee of DTC with respect to the Bonds.

“City” means the City of Wichita, Kansas.

“City Manager” means the duly appointed and acting City Manager of the Issuer or, in the Manager's absence, the duly appointed Deputy, Assistant or Acting City Manager of the Issuer.

“Clerk” means the duly appointed and acting Clerk of the Issuer or, in the Clerk's absence, the duly appointed Deputy, Assistant or Acting Clerk of the Issuer.

“Code” means the Internal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereunder by the United States Department of the Treasury or applicable thereto.

“Consultant” means the Consulting Engineer, the Independent Accountant or an independent consultant qualified and having a favorable reputation for skill and experience in financial affairs selected by the Issuer for the purpose of carrying out the duties imposed on the Consultant by the Bond Resolution.

“Consulting Engineer” means an independent engineer or engineering firm or architect or architectural firm, having a favorable reputation for skill and experience in the construction, financing and operation of public utilities, at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Consulting Engineer by the Bond Resolution.

“Costs of Issuance” means all costs of issuing any series of Bonds, including all publication, printing, signing and mailing expenses in connection therewith, registration fees, financial advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in connection with compliance with the Code, all expenses incurred in connection with receiving financial ratings on any series of Bonds, and any premiums or expenses incurred in obtaining any credit enhancement.

“Costs of Issuance Account” means Costs of Issuance Account for Water and Sewer Utility Revenue Bonds, Series 2021A.

“Current Expenses” means, as applied to either component of the Utility, the Issuer’s reasonable and necessary current expenses of operation, repair and maintenance, and shall include, without limiting the generality of the foregoing, (a) all ordinary and usual expenses of maintenance, repair and operation, which may include expenses not annually recurring, (b) all administrative expenses, (c) any reasonable payments to pension or retirement funds properly chargeable to each component of the Utility, (d) insurance premiums, (e) engineering expenses relating to operation, repair and maintenance, (f) legal expenses, (g) any lawful fiscal agency commissions and expenses in connection with the payment of the principal of and the interest and any redemption premium on Outstanding Bonds, (h) any taxes which may be lawfully imposed on either component of the Utility or the income therefrom and reserves for such taxes, (i) the expenses of collecting rates, fees and charges for the use of and for the services furnished or to be furnished by the Utility, (j) if required by law, the payment of the principal of and the interest on outstanding bonds and other obligations heretofore issued by the Issuer or by improvement districts heretofore annexed by the City to pay the cost of any portion of the Utility to the extent that the special assessments and taxes pledged for the payment of such principal and interest shall be insufficient for such purposes and to the extent that such payment shall not be made from the Improvement Account, and (k) any other expenses required to be paid by the Issuer under the provisions of this Resolution or by law. “Current Expenses” shall not include any reserves for extraordinary maintenance or repair, or any allowance for depreciation, the Payment to the City, or any deposits or transfers to the credit of the Principal and Interest Account, the Bond Reserve Account, the Depreciation and Replacement Account or the Improvement Account.

“Dated Date” means, with respect to the Series 2021A Bonds, June 1, 2021.

“Debt Service Coverage Ratio” means, for any Fiscal Year: (a) with respect to the rate covenants, the ratio determined by dividing (i) a numerator equal to the Net Revenues Available for Debt Service for such Fiscal Year by (ii) a denominator equal to the Debt Service Requirements for such Fiscal Year; and (b) with respect to Additional Indebtedness, the ratio determined by dividing (i) a numerator equal to the average Net Revenues Available for Debt Service for the two (2) prior Fiscal Years by (ii) a denominator equal to the Maximum Annual Debt Service; provided that with respect to Additional Indebtedness that are proposed to be Parity Indebtedness, Debt Service Requirements on Subordinate Lien Obligations and General Obligation Indebtedness shall be disregarded.

C-3 “Debt Service Requirements” means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and interest payments on any Utility Indebtedness or General Obligation Indebtedness for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State and having full trust powers.

“Defaulted Interest” means interest on any Bond which is payable but not paid on any Interest Payment Date.

“Defeasance Obligations” means any of the following obligations:

(a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or

(b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions:

(1) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions;

(2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations;

(3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations;

(4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust;

(5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and

(6) such obligations are rated in a rating category by Moody's or Standard & Poor's that is no lower than the rating category then assigned by that Rating Agency to United States Government Obligations.

“Depreciation and Replacement Account” means the Water and Sewer Utility Depreciation and Replacement Account.

“Depreciation and Replacement Account Requirement” means an amount equal fifteen percent (15%) of the Operating Revenues of the Utility for the preceding Fiscal Year.

“Derivative” means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations.

“Director of Finance” means the duly appointed and acting Director of Finance of the Issuer or, in the Director's absence, the duly appointed Deputy, Assistant or Acting Director of Finance of the Issuer.

“Disclosure Undertaking” means the Issuer’s Continuing Disclosure Undertaking, dated as of June 10, 2021, for the Series 2021A Bonds, relating to certain obligations contained in the SEC Rule.

“Discount Indebtedness” means Long-Term Indebtedness that is originally sold at a price (excluding accrued interest, but without deduction of any underwriters' discount) of less than 75% of the maturity amount including the amount of principal and interest to accrete at maturity of such Long-Term Indebtedness.

“DTC” means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns, including any successor securities depository duly appointed.

“Event of Default” means each of the following occurrences or events:

C-4 (a) Payment of the principal and of the redemption premium, if any, of any of the Utility Indebtedness shall not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for redemption or otherwise; or

(b) Payment of any installment of interest on any Utility Indebtedness shall not be made when the same shall become due; or

(c) The Issuer shall for any reason be rendered incapable of fulfilling its obligations hereunder; or

(d) Any substantial part of the Utility shall be destroyed or damaged to the extent of impairing its efficient operation or adversely affecting its Gross Revenues and the Issuer shall not within a reasonable time commence the repair, replacement or reconstruction thereof and proceed thereafter to complete with reasonable dispatch the repair, replacement or reconstruction thereof; or

(e) Final judgment for the payment of money shall be rendered against the Issuer as a result of the ownership, control or operation of the Utility and any such judgment shall not be discharged within one hundred twenty (120) days from the entry thereof or an appeal shall not be taken therefrom or from the order, decree or process upon which or pursuant to which such judgment shall have been granted or entered, in such manner as to stay the execution of or levy under such judgment, order, decree or process or the enforcement thereof; or

(f) An order or decree shall be entered, with the consent or acquiescence of the Issuer, appointing a receiver or receivers of the Utility or any part thereof or of the Gross Revenues thereof, or if such order or decree, having been entered without the consent or acquiescence of the Issuer, shall not be vacated or discharged or stayed on appeal within sixty (60) days after the entry thereof; or

(g) Any proceeding shall be instituted, with the consent or acquiescence of the Issuer, for the purpose of effecting a composition between the Issuer and its creditors or for the purpose of adjusting the claims of such creditors pursuant to any federal or state statute now or hereafter enacted, if the claims of such creditors are under any circumstances payable from the Net Revenues Available for Debt Service; or

(h) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in Utility Indebtedness or in the Bond Resolution (other than the covenants relating to continuing disclosure) on the part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of Utility Indebtedness then Outstanding; or

In determining whether an Event of Default shall have occurred with respect to the due and prompt payment of the Debt Service Requirements on any Insured Bonds no effect shall be given to payments made under any Bond Insurance Policy.

“Federal Tax Certificate” means the Issuer's Federal Tax Certificate dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof.

“Financeable Costs” means the amount of expenditure for a Project which has been duly authorized by action of the Governing Body to be financed by Utility Indebtedness, less: (a) the amount of any Utility Indebtedness of the Issuer which is currently Outstanding and available to pay such Financeable Costs; and (b) any amount of Financeable Costs which has been previously paid by the Issuer or by any eligible source of funds unless such amounts are entitled to be reimbursed to the Issuer under State or federal law.

“Fiscal Year” means the twelve month period ending on December 31.

“Funds and Accounts” means funds and accounts created pursuant to or referred to in the Bond Resolution.

“General Obligation Indebtedness” means any of the Issuer’s general obligation bonds issued for improvements to the Utility.

“Governing Body” means the duly elected and/or appointed and acting persons comprising the City Council of the Issuer.

“Gross Revenues” means all income and revenues derived and collected by the Issuer from the operation of the Utility, including investment and rental income, net proceeds from business interruption insurance and any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation and equipping of facilities to be applied during the period of determination to pay interest on Utility Indebtedness, but excluding non-cash contributions capital C-5 contributions, any profits or losses on the early extinguishment of debt or on the sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets.

“Improvement Account” means the Water and Sewer Utility Improvement Account.

“Independent Accountant” means an independent certified public accountant or firm of independent certified public accountants at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Independent Accountant by the Bond Resolution.

“Index Rate” means the rate of interest set forth in The Bond Buyer Revenue Bond Index (or, in the event that The Bond Buyer does not compile such index or ceases publication, another comparable publication recognized in the municipal bond market) published for the week immediately preceding the date of determination.

“Insured Bonds” means the Insured Series 2017A Bonds, Insured Series 2019A Bonds, the Series 2020A Bonds and any other Utility Indebtedness of which the scheduled payment of principal and interest is guaranteed by a Bond Insurance Policy.

“Insured Series 2017A Bonds” means the Series 2017A Bonds scheduled to mature in the years 2031, 2033 and 2037.

“Insured Series 2019A Bonds” means the Series 2019A Bonds scheduled to mature in the years 2032 through 2039, inclusive.

“Interest Payment Date(s)” means: (a) with respect to the Series 2021A Bonds, the Stated Maturity of an installment of interest on the Series 2021A Bonds which shall be April 1 and October 1 of each year, commencing October 1, 2021; (b) with respect to the Outstanding Parity Bonds, the Stated Maturity of an installment of interest on such Outstanding Parity Bond Resolutions, and (c) with respect to Additional Indebtedness, the Stated Maturity of an installment of interest on such Additional Indebtedness, as set forth in the supplemental resolution authorizing such Additional Indebtedness.

“Interim Indebtedness” means Utility Indebtedness having a term not less than one year, and not in excess of five years, incurred or assumed in anticipation of being refinanced or refunded with Long-Term Indebtedness.

“Issue Date” means the date when the Issuer delivers any series of Utility Indebtedness to the Purchaser in exchange for the Purchase Price.

“Issuer” means the City and any successors or assigns.

“KDHE Loan” means collectively the Loan Agreement(s) entered into between the City and the Kansas Department of Health and Environment, the City’s payments pursuant to which are secured by the Net Revenues on a parity with the Parity Bonds.

“Long-Term Indebtedness” means Utility Indebtedness having an original stated maturity or term greater than one year, or renewable or extendible at the option of the debtor for a period greater than one year from the date of original issuance or incurrence thereof.

“Maturity” when used with respect to any Utility Indebtedness means the date on which the principal of such Utility Indebtedness becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for redemption or otherwise.

“Mayor” means the duly elected and acting Mayor, or in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the Issuer.

“Maximum Annual Debt Service” means the maximum amount of Debt Service Requirements as computed for the then current or any future Fiscal Year; provided that the Debt Service Requirements in the final Stated Maturity of any series of Utility Indebtedness shall be reduced by the value of cash and Permitted Investments on deposit in the Bond Reserve Subaccount for such series, so long as the Bond Reserve Subaccount for such Utility Indebtedness is maintained at the Bond Reserve Requirement.

“Moody's” means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody's” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. C-6 “Net Proceeds” shall mean any insurance proceeds or condemnation awards, paid with respect to the Utility, remaining after the payment therefrom of all expenses incurred in the collection thereof.

“Net Revenues” means, for the period of determination, the amount of the excess of Gross Revenues deposited to the credit of the Revenue Fund, over the Current Expenses of the respective components of the Utility paid from the Revenue Fund during such period; such amount specifically excluding Debt Service Requirements paid, depreciation, amortization and capital expenditures for improvements to the Utility.

“Net Revenues Available for Debt Service” means the Net Revenues.

“Official Statement” means Issuer’s Official Statement relating to the Series 2021A Bonds.

“Operating Revenues” shall mean the Gross Revenues, less investment income and less Current Expenses.

“Ordinance” means the Ordinance of the Issuer authorizing the issuance of the Series 2021A Bonds, as amended from time to time.

“Outstanding” means, when used with reference to any Utility Indebtedness, as of a particular date of determination, all Utility Indebtedness theretofore, authenticated and delivered, except the following Utility Indebtedness:

(a) Utility Indebtedness theretofore canceled by the Paying Agent or delivered to the Paying Agent for cancellation pursuant to the Bond Resolution;

(b) Utility Indebtedness deemed to be paid in accordance with the provisions of the Bond Resolution;

(c) Utility Indebtedness in exchange for or in lieu of which other Utility Indebtedness has been authenticated and delivered under the Bond Resolution; and

(d) Utility Indebtedness, the principal or interest of which has been paid by the Bond Insurer.

“Outstanding Parity Bond Resolution” means the ordinances and resolutions authorizing the issuance of the Outstanding Parity Bonds.

“Outstanding Parity Bonds” means the Outstanding Series 2011A Bonds, Series 2014 Bonds, Series 2015 Bonds, Series 2016 Bonds, Series 2017 Bonds, Series 2019 Bonds, and Series 2020 Bonds; provided that the Series 2020B Bonds have been issued but are not yet Outstanding under the terms of the Series 2020B Bond Resolution.

“Owner” when used with respect to any Utility Indebtedness means the Person in whose name such Utility Indebtedness is registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of the Bond Resolution, and the Owner of the Utility Indebtedness, as set forth on the Bond Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Utility Indebtedness.

“Parity Bonds” means the Outstanding Parity Bonds, the Series 2021A Bonds and any Additional Bonds hereafter issued or incurred pursuant to the Bond Resolution and standing on a parity and equality with the Series 2021A Bonds with respect to the Net Revenues.

“Parity Indebtedness” means, collectively, the Parity Bonds and Parity Obligations.

“Parity Obligations” means any amounts drawn and outstanding pursuant to the KDHE Loan and any Additional Obligations hereafter issued or incurred pursuant to the Bond Resolution and standing on a parity and equality with the Parity Bonds with respect to the lien on the Net Revenues.

“Parity Resolution” means, collectively, the Outstanding Parity Bond Resolution, the Series 2021A Bond Resolution and the ordinances and/or resolutions under which any Additional Bonds which constitute Parity Bonds are hereafter issued and shall also mean the terms of any Parity Indebtedness relating to the security for such Parity Indebtedness.

“Participants” means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference.

“Paying Agent” means: (a) with respect to the Outstanding Parity Bonds and the Series 2021A Bonds, the State Treasurer, and its successors and assigns; and (b) with respect to Additional Indebtedness, the entity designated as Paying Agent in the supplemental resolution authorizing such Additional Indebtedness. C-7 “Payment to the City” shall mean the payment to the City’s general fund as a payment for operation of the Utility. The amount of the annual Payment to the City shall be governed by the terms of such ordinances or resolutions of the City which are then in effect with respect to the then outstanding Utility Indebtedness.

“Person” means any natural person, corporation, partnership, joint venture, association, firm, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body.

“Pre-2014 Bonds” means the Series 2011A Bonds.

“Principal and Interest Account” shall mean the Water and Sewer Utility Principal and Interest Account.

“Project” shall mean, collectively, the repairs, alterations, extensions, reconstructions, enlargements or improvements to the Utility referred to in the Series 2021A Bond Resolution and any Substitute Project.

“Project Costs” shall mean, as applied to the Projects, any and all costs and expenses incurred in connection with the acquisition or construction of the Projects, and shall include, without intending thereby to limit or restrict any proper definition of such words under the provisions of the Act, the following:

(a) Obligations incurred for labor and to contractors, builders and materialmen in connection with the construction of the Projects, for machinery and equipment, and for the restoration of property damaged or destroyed in connection with such construction;

(b) Taxes or other municipal or governmental charges lawfully levied or assessed during construction upon the Projects or any property acquired therefor, and premiums on insurance (if any) in connection with the Projects during the construction thereof;

(c) Fees and expenses of engineers, including the Consulting Engineers, for studies, surveys and estimates, engineering, and the preparation of plans and supervision of construction, as well as for the performance of all other duties of engineers in relation to the acquisition and construction of the Projects or the issuance of financing therefor;

(d) Expenses of administration properly chargeable to the Projects, legal expenses and fees, financing charges, costs of audits and of preparing and issuing the Bonds, and all other items of expense not elsewhere in this definition specified but incident to the acquisition and construction of the Projects and the placing of the same in operation and to the acquisition of real estate, franchises and rights-of-way therefor, including abstracts of title and title insurance, and the financing thereof, including specifically the Costs of Issuance;

(e) The costs of acquiring by purchase, if such purchase shall be deemed expedient, and the amount of award or final judgment in or any settlement or compromise of any proceedings to acquire by condemnation, such property, lands, property rights, rights-of-way, franchises, easements and other interests in land as may be deemed necessary or convenient for the acquisition or construction of the Projects, or the operation thereof, options and partial payments thereon, and the amount of any damages incident to or consequent upon the acquisition or construction of the Projects; and

(f) Any obligation or expense heretofore or hereafter incurred by the City and any amounts heretofore or hereafter advanced by the City or by any agency of the State or the Federal Government for any of the foregoing purposes, specifically including the payment and retirement of any temporary financing which may have previously been issued for any individual Project.

“Project Fund” with respect to the Series 2021A Bonds, shall mean, collectively, the Series 2021A Sewer Projects Fund and the Series 2021A Water Projects Fund.

“Purchaser” means the financial institution or investment banking firm that is original purchaser of any series of Bonds.

“Put Indebtedness” means Long-Term Indebtedness which is (a) payable or required to be purchased or redeemed from the holder by or on behalf of the underlying obligor, at the option of the holder thereof, prior to its stated maturity date, or (b) payable or required to be purchased or redeemed from the holder by or on behalf of the underlying obligor, other than at the option of the holder, prior to its stated maturity date, other than pursuant to any mandatory sinking fund or other similar fund, or other than by reason of acceleration upon the occurrence of an Event of Default under the Bond Resolution.

“Rating Agency” means any company, agency or entity that provides financial ratings for any Utility Indebtedness.

“Rebate Fund” means the Rebate Fund for Water and Sewer Utility Revenue Bonds, Series 2021A. C-8 “Record Dates” for the interest payable on any Interest Payment Date means the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date.

“Redemption Date” when used with respect to any Utility Indebtedness to be redeemed means the date fixed for the redemption of such Utility Indebtedness pursuant to the terms of the Bond Resolution.

“Redemption Price” when used with respect to any Utility Indebtedness to be redeemed means the price at which such Utility Indebtedness is to be redeemed pursuant to the terms of the Bond Resolution, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date.

“Refunding Indebtedness” means Utility Indebtedness issued for the purpose of refunding any Outstanding Utility Indebtedness.

“Replacement Bonds” means Bonds issued to the Beneficial Owners of the Bonds in accordance with the Bond Resolution.

“Revenue Fund” means the Water and Sewer Utility Revenue Fund.

“SEC Rule” means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

“Securities Depository” means, initially, DTC, and its successors and assigns.

“Series 2011A Bond Resolution” means collectively the Issuer's Ordinance No. 49-148 and Resolution No. 11-260, which authorized the Series 2011A Bonds.

“Series 2011A Bonds” means the Issuer’s Water and Sewer Utility Refunding Revenue Bonds, Series 2011A, dated November 17, 2011.

“Series 2014 Bonds” means, collectively, the Series 2014A Bonds and Series 2014B Bonds.

“Series 2014A Bond Resolution” means collectively the Issuer's Ordinance No. 49-786 and Resolution No. 14-188, which authorized the Series 2014A Bonds.

“Series 2014A Bonds” means the Issuer's Water and Sewer Utility Refunding Revenue Bonds, Series 2014A, dated August 1, 2014.

“Series 2014B Bond Resolution” means collectively the Issuer's Ordinance No. 49-901 and Resolution No. 14-370, which authorized the Series 2014B Bonds.

“Series 2014B Bonds” means the Issuer's Water and Sewer Utility Revenue Bonds, Series 2014B, dated December 1, 2014.

“Series 2015 Bonds” means, collectively, the Series 2015B Bonds, Series 2015C Bonds and Series 2015D Bonds.

“Series 2015B Bond Resolution” means collectively the Issuer's Ordinance No. 49-975 and Resolution No. 15-086, which authorized the Series 2015B Bonds.

“Series 2015B Bonds” means the Issuer's Water and Sewer Utility Refunding Revenue Bonds, Series 2015B, dated April 1, 2015.

“Series 2015C Bond Resolution” means collectively the Issuer's Ordinance No. 50-096 and Resolution No. 15-341, which authorized the Series 2015C Bonds.

“Series 2015C Bonds” means the Issuer's Water and Sewer Utility Revenue Bonds, Series 2015C, dated November 1, 2015.

“Series 2015D Bond Resolution” means collectively the Issuer's Ordinance No. 50-097 and Resolution No. 15-342, which authorized the Series 2015D Bonds.

“Series 2015D Bonds” means the Issuer's Water and Sewer Utility Refunding Revenue Bonds, Series 2015D, dated November 1, 2015. C-9 “Series 2016 Bond Resolution” means, collectively, the Series 2016A Bond Resolution and the Series 2016B Bond Resolution.

“Series 2016 Bonds” means, collectively, the Series 2016A Bonds and the Series 2016B Bonds.

“Series 2016A Bond Resolution” means collectively the Issuer's Ordinance No. 50-294 and Resolution No. 16-200, which authorized the Series 2016A Bonds.

“Series 2016A Bonds” means the Issuer's Water and Sewer Utility Revenue Bonds, Series 2016A, dated August 1, 2016.

“Series 2016B Bond Resolution” means collectively the Issuer's Ordinance No. 50-295 and Resolution No. 16-201, which authorized the Series 2016B Bonds.

“Series 2016B Bonds” means the Issuer's Water and Sewer Utility Refunding Revenue Bonds, Series 2016B, dated August 1, 2016.

“Series 2017 Bonds” means, collectively, the Series 2017A Bonds and the Series 2017B Bonds.

“Series 2017A Bond Resolution” means collectively the Issuer's Ordinance No. 50-536 and Resolution No. 17-187, which authorized the Series 2017A Bonds.

“Series 2017A Bonds” means the Issuer's Water and Sewer Utility Revenue Bonds, Series 2017A, dated June 1, 2017.

“Series 2017B Bond Resolution” means collectively the Issuer's Ordinance No. 50-650 and Resolution No. 17-454, which authorized the Series 2017B Bonds.

“Series 2017B Bonds” means the Issuer's Water and Sewer Utility Refunding Revenue Bonds, Series 2017B, dated December 1, 2017.

“Series 2019 Bonds” means, collectively, the Series 2019A Bonds and the Series 2019B Bonds.

“Series 2019A Bond Resolution” means collectively the Issuer's Ordinance No. 50-925 and Resolution No. 19-055, which authorized the Series 2019A Bonds.

“Series 2019A Bonds” means the Issuer's Water and Sewer Utility Revenue Bonds, Series 2019A, dated March 1, 2019.

“Series 2019B Bond Resolution” means collectively the Issuer's Ordinance No. 50-139 and Resolution No. 19-431, which authorized the Series 2019B Bonds.

“Series 2019B Bonds” means the Issuer's Taxable Water and Sewer Utility Refunding Revenue Bonds, Series 2019B, dated December 1, 2019.

“Series 2020 Bonds” means, collectively, the Series 2020A Bonds, the Series 2020B Bonds, and the Series 2020C Bonds.

“Series 2020A Bond Resolution” means collectively the Issuer's Ordinance No. 51-208 and Resolution No. 20-093, which authorized the Series 2020A Bonds.

“Series 2020A Bonds” means the Issuer's Water and Sewer Utility Revenue Bonds, Series 2020A, dated May 1, 2020.

“Series 2020B Bond Resolution” means collectively the Issuer's Ordinance No. 51-211 and Resolution No. 20-096, which authorized the Series 2020B Bonds.

“Series 2020B Bonds” means the Issuer's Not to Exceed $331,000,000 Taxable Water and Sewer Utility Revenue Bonds, Series 2020B (WIFIA), dated May 14, 2020.

“Series 2020C Bond Resolution” means collectively the Issuer's Ordinance No. 51-349 and Resolution No. 20-278, which authorized the Series 2020C Bonds.

C-10 “Series 2020C Bonds” means the Issuer's Water and Sewer Utility Refunding Revenue Bonds, Series 2020C, dated October 1, 2020.

“Series 2021A Bond Reserve Requirement” shall mean a sum equal to greater of the amount of interest which shall become due and payable on the Series 2021A Bonds during the next Fiscal Year (determined in each year) or the maximum amount of interest which shall become due and payable on the Series 2021A Bonds in any subsequent year, except that, in no event shall the amount of the 2020C Bond Reserve Requirement ever exceed the amount which is the lesser of ten percent (10%) of the original principal amount of the Series 2021A Bonds (determined as of the date of issuance of the Series 2021A Bonds), the maximum annual principal and interest requirements on the Series 2021A Bonds (determined as of the date of issuance of the Series 2021A Bonds), or one hundred twenty-five percent (125%) of the average annual debt service on the Series 2021A Bonds (determined as of the date of issuance of the Series 2021A Bonds).

“Series 2021A Bond Reserve Subaccount” shall mean the Water and Sewer Utility Revenue Bonds, Series 2021A, Bond Reserve Subaccount created within the Bond Reserve Account.

“Series 2021A Bond Resolution” means collectively the Ordinance and the Issuer's resolution, which authorized the Series 2021A Bonds.

“Series 2021A Bonds” means the Issuer's Water and Sewer Utility Revenue Bonds, Series 2021A, dated June 1, 2021, authorized and issued by the Issuer pursuant to the Ordinance and the Series 2021A Bond Resolution.

“Series 2021A Principal and Interest Subaccount” shall mean the Water and Sewer Utility Revenue Bonds, Series 2021A, Principal and Interest Subaccount created by the Series 2021A Bond Resolution within the Principal and Interest Account.

“Series 2021A Sewer Projects” means the Sewer Utility projects financed, in whole or in part, by the Series 2021A Bonds, as described in the Series 2021A Bond Resolution.

“Series 2021A Sewer Utility Projects Fund” means the Sewer Utility Projects Fund for the Series 2021A Bonds.

“Series 2021A Water Projects” means the Water Utility projects financed, in whole or in part, by the Series 2021A Bonds, as described in the Series 2021A Bond Resolution.

“Series 2021A Water Utility Projects Fund” means the Water Utility Projects Fund for the Series 2021A Bonds.

“Sewer Utility” shall mean and include the sanitary sewer system now owned and operated by the City, and consisting of sewage disposal works, sewers, drains, pumping plants, force mains, service connections, canals, ponds, machinery, equipment and other property appurtenant thereto and any improvements, extensions and enlargements to the Sewer Utility hereafter constructed or acquired.

“Short-Term Indebtedness” means Utility Indebtedness having an original maturity less than or equal to one year from the date of original incurrence thereof, and not renewable or extendible at the option of the obligor thereon for a term greater than one year beyond the date of original issuance.

“Special Record Date” means the date fixed by the Paying Agent for the payment of Defaulted Interest.

“Standard & Poor's” or “S&P” means S&P Global Ratings, a division of S&P Global Inc., a corporation organized and existing under the laws of the State of New York, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Standard & Poor's shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer.

“State” means the state of Kansas.

“State Treasurer” means the duly elected Treasurer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the State.

“Stated Maturity” when used with respect to any Utility Indebtedness or any installment of interest thereon means the date specified in such Utility Indebtedness and the Bond Resolution as the fixed date on which the principal of such Utility Indebtedness or such installment of interest is due and payable.

“Subordinate Indebtedness” means, collectively the Subordinate Lien Bonds and Subordinate Lien Obligations

C-11 “Subordinate Lien Bonds” means any Additional Bonds payable from the Revenues, and issued on a subordinate lien basis to any Parity Bonds.

“Subordinate Lien Obligations” means any Additional Obligations payable from, and secured by a lien on, the Revenues, which lien is junior to that of any Parity Obligations.

“Substitute Project” means a substitute or additional project of the Utility authorized in the manner set forth in the Bond Resolution.

“Term Bonds” means any Bonds designated as Term Bonds in the Bond Resolution or in any supplemental resolution authorizing the issuance of Additional Bonds.

“Treasurer” means the duly appointed and/or elected Treasurer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the Issuer.

“United States Government Obligations” means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payment on obligations issued by the United States of America (including the interest component of obligations of the Resolution Funding Corporation), or securities which represent an undivided interest in such obligations, which obligations are rated in the highest rating category by a nationally recognized rating service and such obligations are held in a custodial account for the benefit of the Issuer.

“Utility” shall mean the combined City of Wichita, Kansas Water Utility and Sewer Utility, and any improvements, extensions and enlargements thereto hereafter constructed or acquired.

“Utility Indebtedness” means collectively the Bonds and any Additional Obligations which are secured by an interest in, the Gross Revenues.

“Value” means, for purposes of the Bond Resolution, the value of the Authorized Investments (which Value shall be determined as of the end of each month), calculated as follows:

(a) as to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times) -- the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination;

(b) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or in The New York Times - the average bid price at such time of determination for such investments by any two nationally recognized government securities dealers (selected by the Issuer in its absolute discretion) at the time making a market in such investments or the bid price published by a nationally recognized pricing service; and

(c) as to certificates of deposit and bankers acceptances -- the face amount thereof, plus accrued interest.

“Variable Rate Indebtedness” means any Utility Indebtedness which provides for interest to be payable thereon at a rate per annum that may vary from time to time over the term thereof in accordance with procedures provided in the instrument creating such Utility Indebtedness.

“Water Utility” shall mean and include the waterworks system now owned and operated by the Issuer and consisting of real estate, water rights, purification and pumping plants, reservoirs, mains, wells, pipelines, meters, hydrants, service connections, machinery, equipment and other property appurtenant thereto, and any improvements, extensions and enlargements to the Water Utility hereafter constructed or acquired.

ESTABLISHMENT OF FUNDS AND ACCOUNTS; DEPOSIT AND APPLICATION OF BOND PROCEEDS AND OTHER MONEYS

Creation of Funds and Accounts. The Bond Resolution establishes or ratifies within the treasury of the Issuer the following Funds and Accounts:

(a) Water and Sewer Utility Revenue Fund. (b) Water and Sewer Utility Bond Reserve Account. (c) Water and Sewer Utility Depreciation and Replacement Account. C-12 (d) Water and Sewer Utility Improvement Account. (e) Principal and Interest Subaccount for Water and Sewer Utility Revenue Bonds, Series 2021A. (f) Bond Reserve Subaccount for Water and Sewer Utility Revenue Bonds, Series 2021A. (g) Rebate Fund for Water and Sewer Utility Revenue Bonds, Series 2021A. (h) Costs of Issuance Account for Water and Sewer Utility Revenue Bonds, Series 2021A. (i) Sewer Utility Projects Fund for Water and Sewer Utility Revenue Bonds, Series 2021A. (j) Water Utility Projects Fund for Water and Sewer Utility Revenue Bonds, Series 2021A. (k) Principal and Interest Subaccounts for Outstanding Parity Bonds. (l) Bond Reserve Subaccounts for Outstanding Parity Bonds.

The Funds and Accounts referred to above shall be administered in accordance with the provisions of the Bond Resolution.

Deposit of Bond Proceeds and Other Moneys. The net proceeds received from the sale of the Series 2021A Bonds and certain other moneys shall be deposited simultaneously with the delivery of the Series 2021A Bonds as follows:

(a) All accrued interest and any excess proceeds shall be deposited into the Series 2021A Principal and Interest Subaccount.

(b) An amount necessary to pay Costs of Issuance shall be deposited in the Series 2021A Costs of Issuance Account.

(c) An amount necessary to bring the 2021A Bond Reserve Subaccount to the 2021A Bond Reserve Requirement shall be deposited in the 2021A Bond Reserve Subaccount.

(d) An amount necessary to pay the costs of the Series 2021A Sewer Projects shall be deposited in the Series 2021A Sewer Utility Projects Fund.

(e) An amount necessary to pay the costs of the Series 2021A Water Projects shall be deposited in the Series 2021A Water Utility Projects Fund.

Application of Moneys in the Project Fund. Moneys in the Project Fund shall be used for the sole purpose of: (a) paying Project Costs; (b) paying Costs of Issuance, if necessary; (c) paying interest on the Series 2021A Bonds during construction of the Project, if necessary; and (d) transferring any amounts required to be deposited into the Rebate Fund. Withdrawals from the Project Fund for payment of Project Costs shall be supported by a certificate or statement of the Director of Finance that such payment is being made for a purpose within the scope of the Bond Resolution and is a proper Project Cost. Authorizations for withdrawals for other purposes shall be supported by a certificate of the Director of Finance stating that such payment is being made for a purpose within the purpose of the Bond Resolution. Upon completion of the Project, any surplus remaining in the Project Fund shall be deposited in the Series 2021A Principal and Interest Subaccount.

Substitute Project; Reallocation of Proceeds. The Issuer may elect for any reason to substitute or add other Utility improvements to be financed with proceeds of the 2021A Bonds provided the following conditions are met: (a) the Substitute Project and the issuance of Bonds to pay the cost of the Substitute Project has been duly authorized by the Governing Body in accordance with the laws of the State; (b) a resolution authorizing the use of the proceeds of the Series 2021A Bonds to pay the Financeable Costs of the Substitute Project has been duly adopted by the Governing Body pursuant to this Section, (c) the Attorney General of the State has approved the amendment made by such resolution to the transcript of proceedings for the Series 2021A Bonds to include the Substitute Project; and (d) the use of the proceeds of the Series 2021A Bonds to pay the Financeable Cost of the Substitute Project will not adversely affect the tax status of the Series 2021A Bonds under State or federal law.

The Issuer may reallocate expenditure of Series 2021A Bond proceeds among all Projects financed by the Series 2021A Bonds; provided the following conditions are met: (a) the reallocation is approved by the Governing Body; (b) the reallocation shall not cause the proceeds of the Series 2021A Bonds allocated to any Project to exceed the Financeable Costs of the Project; and (c) the reallocation will not adversely affect the tax-exempt status of the Series 2021A Bonds under State or federal law.

Application of Moneys in the Costs of Issuance Account. Moneys in the Costs of Issuance Accounts shall be used to pay the Costs of Issuance. Any funds remaining in the Costs of Issuance Subaccounts, after payment of all Costs of Issuance but not later than the later of 30 days prior to the first Stated Maturity of principal or one year after the date of issuance of the Series 2021A Bonds, shall be transferred for deposit into the Series 2021A Principal and Interest Subaccount.

C-13 Application of Moneys in the Rebate Fund. There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Federal Tax Certificate. All money at any time deposited in the Rebate Fund shall be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Federal Tax Certificate), for payment to the United States of America, and neither the Issuer nor the Owner of any Series 2021A Bonds shall have any rights in or claim to such money.

COLLECTION AND APPLICATION OF REVENUES

Revenue Fund. The Issuer covenants and agrees that from and after the delivery of the Series 2021A Bonds, and continuing as long as any of the Utility Indebtedness remain Outstanding, all of the Gross Revenues shall as and when received be paid and deposited into the Revenue Fund. Said Revenues shall be segregated and kept separate and apart from all other moneys, revenues, Funds and Accounts of the Issuer and shall not be commingled with any other moneys, revenues, Funds and Accounts of the Issuer. The Issuer shall administer and allocate all of the moneys then held in the Revenue Fund in the following order, as follows:

(a) Operation and Maintenance. The cost of Current Expenses shall be paid currently as bills accrue. Such amount as may be necessary in the opinion of the Governing Body to pay the reasonable and proper Current Expenses for the ensuing sixty (60) days may be retained and accumulated in the Revenue Fund before making transfers to other Funds and Accounts.

Parity Resolutions. The following transfers shall be made on a parity of lien basis with the transfers and requirements of the Bond Resolution with respect to any Parity Indebtedness, and the term Parity Obligations shall be substituted for Bonds, as appropriate.

(b) Principal and Interest Account. There shall next be paid and credited on the first day of each month to the Principal and Interest Account, for credit to the respective Subaccounts thereof, a proportionate amount necessary to meet on each Bond Payment Date the payment of all interest on and principal of the Parity Bonds. All amounts paid and credited to the various Principal and Interest Subaccounts shall be expended and used by the Issuer for the sole purpose of paying the Debt Service Requirements of respective Parity Bonds as and when the same become due at Maturity and on each Interest Payment Date.

If at any time the moneys in the Revenue Fund are insufficient to make in full the payments and credits at the time required to be made to the Principal and Interest Account and to the subaccounts established to pay the principal of and interest on any Parity Bonds, the available moneys in the Revenue Fund shall be divided among such debt service accounts in proportion to the respective principal amounts of said series of Parity Bonds at the time Outstanding which are payable from the moneys in said Principal and Interest Subaccounts.

(c) Bond Reserve Account. There shall next set aside and credited monthly to the Bond Reserve Account, for the credit of the respective subaccounts thereof as appropriate, the amount, if any, required to restore the Bond Reserve Account to the Bond Reserve Requirement. Except as hereinafter provided, all amounts paid and credited to the Bond Reserve Account shall be expended and used by the Issuer solely to prevent any default in the payment of interest on or principal of the Parity Bonds on any Maturity date or Interest Payment Date if the moneys in the respective Principal and Interest Subaccounts are insufficient to pay the Debt Service Requirements of said Parity Bonds as they become due. So long as the Bond Reserve Account aggregates the Bond Reserve Requirement, no further payments into said Account shall be required, but if the Issuer is ever required to expend and use a part of the moneys in any subaccount for the purpose herein authorized and such expenditure reduces the amount of such subaccount below the Bond Reserve Requirement for such subaccount, or if the Value of the any such subaccount is below the Bond Reserve Requirement, the Issuer shall make monthly payments into such subaccount so that such subaccount shall again aggregate the Bond Reserve Requirement within twelve (12) months of such deficiency.

The prior written consent of the Bond Insurer, if any, shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Bond Reserve Account.

(d) Debt Service Accounts-Subordinate Indebtedness. There shall next be paid and credited monthly to the debt service account(s) for any Subordinate Indebtedness, to the extent necessary to meet on each Bond Payment Date an amount equal to the payment of all interest on and principal of any Subordinate Indebtedness. The amounts required to be paid and credited to the debt service account(s) for any Subordinate Indebtedness shall be made at the same time and on a parity with the amounts at the time required to be paid and credited to other debt service accounts established for the payment of the Debt Service Requirements on any Subordinate Indebtedness.

(e) Depreciation and Replacement Account. There shall next be paid and credited monthly to the Depreciation and Replacement Account minimum monthly amounts to the end that the Depreciation and Replacement Account will reach C-14 the Depreciation and Replacement Account Requirement within a period of thirty (30) months from the date of the first such transfer. Except as hereinafter provided, moneys in the Depreciation and Replacement Account shall be expended and used by the Issuer for the purpose of: (1) making extraordinary maintenance and repairs to the Utility, (2) making capital improvements in and to the Utility, and (3) keeping the Utility in good repair and working order so that it may continue in effective and efficient operation. If no other funds are available therefor, moneys in the Depreciation and Replacement Account may be used to pay Current Expenses. After the Depreciation and Replacement Account aggregates the Depreciation and Replacement Account Requirement, no further payments into the Depreciation and Replacement Account shall be required, but if the Issuer is ever required to expend a part of the moneys in the Depreciation and Replacement Account for its authorized purposes and such expenditure reduces the amount of the Depreciation and Replacement Account below the Depreciation and Replacement Requirement, then the Issuer shall resume and continue minimum monthly payments into the Depreciation and Replacement Account aggregates the Depreciation and Replacement Requirement within a period of eighteen (18) months of such deficiency.

(f) General Obligation Indebtedness. There shall next be paid and credited monthly to such of the Issuer’s funds or accounts determined by the Director of Finance, proportionate monthly amounts equal to the Debt Service Requirements on General Obligation Indebtedness accruing in the next twelve (12) months.

(g) Payment to the City. There shall next be paid and credited monthly to such of the Issuer’s funds or accounts determined by the Director of Finance, proportionate monthly amounts equal to the next required Payment to the City.

(h) Improvement Account. All moneys in the Revenue Fund not required for payment of the Current Expenses and all transfers required by subsections (a) to (f) hereof for the next ninety (90) days shall be credited to the Improvement Account. When the Pre-2014 Bonds are no longer Outstanding, transfers from the Revenue Fund to the Improvement Fund may be made on a monthly basis in such amounts as may be determined by the Director of Finance. Moneys in the Improvement Account may be expended and used for the following purposes:

(1) Paying the Current Expenses.

(2) Paying the cost of extending, enlarging or improving the Utility.

(3) Preventing default in, making payments into or increasing the amounts in any of the Funds and Accounts or other payments required by subsections (a) to (g) hereof.

(4) Calling, redeeming and paying prior to Stated Maturity, or, at the option of the Issuer, purchasing in the open market at fair market value, any Utility Indebtedness or General Obligation Indebtedness.

(5) Any other lawful purpose in connection with the operation of the Utility and benefiting the Utility.

(6) To make transfers to the Revenue Fund.

(i) Deficiency of Payments into Funds and Accounts. If at any time the Gross Revenues are insufficient to make any payment on the date or dates hereinbefore specified, the Issuer will make good the amount of such deficiency by making additional payments or credits out of the first available Gross Revenues, such payments and credits being made and applied in the order hereinbefore specified in this Section.

Transfer of Funds to Paying Agent. The Treasurer of the Issuer shall withdraw from the Principal and Interest Account, and, to the extent necessary to prevent a default in the payment of either principal of or interest on the Utility Indebtedness, from the Bond Reserve Account, and the Improvement Account, sums sufficient to pay the principal of and interest on the Utility Indebtedness as and when the same become due on any Bond Payment Date, and to forward such sums to the Paying Agent in a manner which ensures the Paying Agent will have available funds in such amounts on or before the Business Day immediately preceding each Bond Payment Date.

Payments Due on Saturdays, Sundays and Holidays. In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date.

Nonpresentment. If any Utility Indebtedness is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Utility Indebtedness have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Utility Indebtedness shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Utility Indebtedness, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under the Bond Resolution or on, or with respect to, said Utility Indebtedness. If any Utility C-15 Indebtedness is not presented for payment within six years following the date when such Utility Indebtedness becomes due at Maturity, the Paying Agent shall repay to the Issuer the funds theretofore held by it for payment of such Utility Indebtedness, and such Utility Indebtedness shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money.

DEPOSIT AND INVESTMENT OF MONEYS

Deposits. Moneys in each of the Funds and Accounts shall be deposited and shall be adequately secured as provided by the laws of the State.

Investments. Moneys held in any Fund or Account may be invested in accordance with the Bond Resolution and the Federal Tax Certificate, in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such Fund or Account was established; and provided, further, that Authorized Investments in the Bond Reserve Account shall have an average aggregate weighted term to maturity not greater than five years. All earnings on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account, other than earnings required to be deposited into the Rebate Fund pursuant to the Federal Tax Certificate. All earnings on investments held in the Bond Reserve Account shall accrue to and become a part of the Bond Reserve Account until the amount on deposit in the Bond Reserve Account shall aggregate the Bond Reserve Requirement; thereafter, all such earnings shall be credited to the Principal and Interest Account. All earnings on investments held in the Depreciation and Replacement Account shall accrue to and become a part of the Depreciation and Replacement Account until the amount on deposit in the Depreciation and Replacement Account shall aggregate the Depreciation and Replacement Requirement; thereafter, all such earnings shall be credited to the Revenue Fund.

Valuation of Investments. The Value of any Fund or Account shall be determined at the end of each calendar month. Such valuation shall also be made in conjunction with redemption of any Utility Indebtedness.

ADDITIONAL BONDS AND OBLIGATIONS

Prior Lien Bonds. So long as any of the Parity Bonds remain Outstanding, the Issuer will not issue any Utility Indebtedness payable out of the Gross Revenues which are superior to the Parity Indebtedness with respect to the lien on the Net Revenues.

Parity Indebtedness. The Issuer will not issue any Utility Indebtedness which stands on a parity or equality of lien against the Net Revenues with the Parity Indebtedness unless the following conditions are met:

(a) The Issuer shall not be in default in the payment of the Debt Service Requirements on any Parity Indebtedness at the time Outstanding or in making any payment at the time required to be made into the respective Funds and Accounts created by and referred to in the Bond Resolution (unless such Utility Indebtedness is being issued to provide funds to cure such default) nor shall any other Event of Default have occurred and be continuing;

(b) The Issuer shall deliver the following:

(1) Long-Term Indebtedness. A certificate signed by the Issuer evidencing that the Debt Service Coverage Ratio for the two (2) Fiscal Years immediately preceding the issuance of such Utility Indebtedness, as reflected by information provided by the Independent Accountant, shall be not less than 1.20, including the Utility Indebtedness proposed to be issued. In the event that the Issuer has instituted any increase in rates for the use and services of the Utility and such increase shall not have been in effect during the full two (2) Fiscal Years immediately preceding the issuance of such proposed Utility Indebtedness, the additional Net Revenues Available for Debt Service which would have resulted from the operation of the Utility during said two (2) preceding Fiscal Years had such rate increase been in effect for the entire period may be added to the stated Net Revenues for the calculation of the Debt Service Coverage Ratio, provided that such estimated additional Net Revenues shall be determined by a Consultant.

(2) Short-Term Indebtedness. A certificate signed by the Issuer evidencing any one of the following:

(i) The principal amount of all Outstanding Short-Term Indebtedness does not exceed 15% of the Gross Revenues for the most recently ended Fiscal Year for which financial information is available from the Independent Accountant;

(ii) The Short-Term Indebtedness could be incurred assuming it was Long-Term Indebtedness.

C-16 (iii) There is delivered to the Issuer a certificate of a Consultant to the effect that it is such Consultant's opinion that it is reasonable to assume that the Issuer will be able to refinance such Short-Term Indebtedness prior to its Stated Maturity and the conditions are met with respect to such Short-Term Indebtedness when it is assumed that such Short-Term Indebtedness is Long-Term Indebtedness maturing over 20 years (or such shorter period as such Consultant indicates is reasonable to assume in such statement) from the date of issuance of the Short-Term Indebtedness and bears interest on the unpaid principal balance at the Index Rate and is payable on a level annual debt service basis over a 20-year period (or such shorter period as such Consultant indicates is reasonable to assume in such statement).

(3) Interim Indebtedness. A certificate signed by the Issuer evidencing any either of the following:

(i) The Interim Indebtedness could be incurred assuming it was Long-Term Indebtedness.

(ii) There is delivered to the Issuer a certificate of a Consultant to the effect that it is such Consultant's opinion that it is reasonable to assume that the Issuer will be able to refinance such Interim Indebtedness prior to its Stated Maturity and the conditions are met with respect to such Interim Indebtedness when it is assumed that such Interim Indebtedness is Long-Term Indebtedness maturing over 20 years (or such shorter period as such Consultant indicates is reasonable to assume in such statement) from the date of issuance of the Interim Indebtedness and bears interest on the unpaid principal balance at the Index Rate and is payable on a level annual debt service basis over a 20-year period (or such shorter period as such Consultant indicates is reasonable to assume in such statement).

(c) When the issuance of Utility Indebtedness of equal stature and priority is permitted by the laws of the State.

(d) With respect to the issuance of Additional Bonds, an additional deposit to the Bond Reserve Account shall be made to bring the Bond Reserve Account to an amount equal to the Bond Reserve Requirement.

(e) The ordinance and/or resolution authorizing such Utility Indebtedness shall contain or provide for substantially the same terms, conditions, covenants and procedures as established in the Bond Resolution.

Additional Utility Indebtedness issued under the conditions hereinbefore set forth shall stand on a parity with other Parity Indebtedness and shall enjoy complete equality or lien on and claim against the Net Revenues, and the Issuer may make equal provision for paying the Debt Service Requirements on such Utility Indebtedness out of the Revenue Fund and may likewise provide for the creation of reasonable debt service accounts and debt service reserve accounts for the payment of the Debt Service Requirements on such Utility Indebtedness and the interest thereon out of moneys in the Revenue Fund.

Subordinate Indebtedness. Nothing shall prohibit or restrict the right of the Issuer to issue Subordinate Indebtedness for any lawful purpose in connection with the operation of and benefiting the Utility and to provide that the Debt Service Requirements on such Subordinate Indebtedness shall be payable out of the Net Revenues Available for Debt Service, provided at the time of the issuance of such Subordinate Indebtedness the Issuer is not in default in the performance of any covenant or agreement contained in the Bond Resolution (unless such Utility Indebtedness shall be issued to cure such default and shall be junior and subordinate to the Parity Indebtedness) so that if at any time the Issuer shall be in default in paying either interest on or principal of the Parity Indebtedness, or of the Issuer is in default in payment of Current Expenses, Debt Service Requirements on Parity Indebtedness or transfers required by the Bond Resolution prior to the payment of Debt Service Requirements on Subordinate Indebtedness, the Issuer shall make no payments of Debt Service Requirements on said Subordinate Indebtedness until said default or defaults be cured.

Refunding Indebtedness. The Issuer shall have the right, without complying with the provisions relating to Parity Indebtedness above, to refund any Utility Indebtedness under the provisions of any law then available, and the Refunding Indebtedness so issued shall enjoy complete equality of pledge as did the Utility Indebtedness being refunded.

CALCULATION OF DEBT SERVICE REQUIREMENTS

(a) Debt Service Requirements on Balloon, Put, Short-Term and Interim Indebtedness.

(1) The principal of Balloon Indebtedness, Put Indebtedness or Short-Term Indebtedness being treated as Long-Term Indebtedness, or Interim Indebtedness shall be deemed due and payable at its Stated Maturity; provided, however, that at the election of the Authority for the purpose of any computation of Debt Service Requirements, whether historical or projected, the principal deemed payable on Balloon Indebtedness, Put Indebtedness or Short- Term Indebtedness being treated as Long-Term Indebtedness, or Interim Indebtedness, shall be deemed to be payable as set forth below:

C-17 (i) If the Issuer has obtained a binding commitment of a bank or other financial institution (whose senior debt obligations, or the senior debt obligations of the holding company of which such bank or financial institution is the principal subsidiary, are then rated “A” or better by any Rating Agency) to refinance such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or a portion thereof, including without limitation, a letter of credit or a line of credit, the Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or portion thereof to be refinanced, may be deemed to be payable in accordance with the terms of the refinancing arrangement;

(ii) If the Issuer has entered into a binding agreement providing for the deposit by the Issuer with a bank or other financial institution (whose senior debt obligations, or the senior debt obligations of the holding company of which such bank or financial institution is the principal subsidiary, are then rated “A” or better by any Rating Agency), in trust (herein called a “Special Redemption Fund”) of amounts, less investment earnings realized and retained in the Special Redemption Fund, equal in aggregate to the principal amount of such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or a portion thereof, when due from the sums so deposited and investment earnings realized thereon, then the principal amount of the Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or portion thereof, may be deemed to be payable in accordance with the terms of such agreement;

(iii) If the Issuer has entered into arrangements or agreements with respect to the principal amount of such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, other than those referred to in subsections (A) and (B) above, which a Consultant in a certificate filed with the Issuer determines, taking into account the interests of the Owners of Utility Indebtedness, provides adequate assurances that the Issuer will be able to meet the Debt Service Requirements due on such Indebtedness, the Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness may be deemed to be payable in accordance with the terms of such arrangement or agreement; or

(iv) Such Balloon Indebtedness, Put Indebtedness or Short-Term Indebtedness may be deemed to be Utility Indebtedness which, at the date of its original incurrence, was payable over a term not to exceed twenty (20) years in equal annual installments of principal and interest at the Index Rate.

A Consultant shall deliver to the Issuer a certificate stating that it is reasonable to assume that installment obligations of such term of the Issuer can be incurred and stating the interest rate then applicable to installment obligations of such term of comparable quality. Interim Indebtedness may be deemed to be Indebtedness which, at the date of its original incurrence, would meet the conditions specified in the statement of the Consultant; provided that the Consultant shall for each annual period that the Debt Service Requirement is computed, provide a supplemental statement that at such period, the certifications contained in the statement are reasonable.

(2) Interest that is payable prior to the Stated Maturity of any Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness shall be taken into account for such appropriate period in computation of Debt Service Requirements. Interest payable at maturity or early redemption on Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness may either be amortized over the anticipated maturity or such longer period as is permitted or may be treated as principal payable on the principal maturity date of such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness.

(3) In measuring compliance with the applicable tests hereunder in connection with incurring Put Indebtedness and generally for purposes of determining the Debt Service Requirements relating thereto, Put Indebtedness shall be deemed to mature based upon the actual amortization requirements for the Put Indebtedness, only to the extent that the Issuer has a commitment to refinance such Put Indebtedness.

(b) Debt Service Requirements on Discount Indebtedness. At the election of the Issuer for the purpose of any computation of Debt Service Requirements, whether historical or projected, the principal and interest deemed payable on Discount Indebtedness shall be deemed to be payable as set forth below:

(1) If the Issuer has obtained a binding commitment of a bank or other financial institution (whose senior debt obligations, or the senior debt obligations of the holding company of which such bank or financial institution is the principal subsidiary, are then rated “A” or better by any Rating Agency) to refinance such Discount Indebtedness, or a portion thereof, including without limitation, a letter of credit or a line of credit, the Discount Indebtedness, or portion thereof to be refinanced, may be deemed to be payable in accordance with the terms of the refinancing arrangement;

C-18 (2) If the Issuer has entered into a binding agreement providing for the deposit with a bank or other financial institution (whose senior debt obligations, or the senior debt obligations of the holding company of which such bank or financial institution is the principal subsidiary, are then rated “A” or better by any Rating Agency), in trust (herein called a “Special Redemption Fund”) of amounts, less investment earnings realized and retained in the Special Redemption Fund, equal in aggregate to the principal amount of such Discount Indebtedness, or a portion thereof, and providing for the payment of such principal amount when due from the sums so deposited, and investment earnings realized thereon, then the Discount Indebtedness, or portion thereof, may be deemed to be payable in accordance with the terms of such agreement;

(3) If the Issuer has entered into arrangements or agreements with respect to the principal amount of such Discount Indebtedness, other than those referred to in subsections (1) and (2) above, which a Consultant in a certificate filed with the Issuer determines, taking into account the interests of the holders of Utility Indebtedness, provides adequate assurances that the Issuer will be able to meet the Debt Service Requirements due on such Indebtedness, the Discount Indebtedness may be deemed to be payable in accordance with the terms of such arrangement or agreement; or

(4) As of any time the maturity amount represented by Discount Indebtedness shall be deemed to be the accreted value of such Indebtedness computed on the basis of a constant yield to maturity.

(c) Debt Service Requirements on Variable Rate Indebtedness. When calculating interest requirements on Variable Rate Indebtedness which bears a variable rate of interest for periods as to which the rate of interest has not been determined, the rate of interest on Outstanding Variable Rate Indebtedness shall be the average annual rate of interest which was payable on such Variable Rate Indebtedness during the twelve (12) months immediately preceding the date as of which the calculation is made; and the rate of interest on Variable Rate Indebtedness to be incurred (or incurred less than twelve (12) months preceding such date) shall be the average annual rate of interest which would have been payable on such Variable Rate Indebtedness had it been outstanding for a period of twelve (12) months immediately preceding the date as of which the calculation is made, as evidenced in a certificate of a Consultant, delivered to the Issuer.

GENERAL COVENANTS AND PROVISIONS

Efficient and Economical Operation. The Issuer will continuously own and will operate the Utility as a revenue producing facility in an efficient and economical manner and will keep and maintain the same in good repair and working order.

Rate Covenant. The Issuer, in accordance with and subject to applicable legal requirements, will fix, establish, maintain and collect such rates and charges for the use and services furnished by or through the Utility as will produce Gross Revenues sufficient to: (a) pay the Current Expenses; (b) pay the Debt Service Requirements on the Utility Indebtedness as and when the same become due at the Maturity thereof or on any Interest Payment Date; (c) provide reasonable and adequate reserves for the payment of the Utility Indebtedness and for the protection and benefit of the Utility as provided in the Bond Resolution; and (d) enable the Issuer to have in each Fiscal Year, a Debt Service Coverage Ratio of not less than 1.20 on all Parity Indebtedness at the time Outstanding; 1.00 on all Subordinate Indebtedness at the time Outstanding; 1.00 on all General Obligation Indebtedness at the time Outstanding; and 1.00 with respect to the Payment to the City; provided however, in determining the Net Revenues Available for Debt Service, estimated additional net income to be derived from rate increases in effect and being charged prior to the end of the applicable Fiscal Year, as determined by the Consultant, may be taken into account, and that, without giving effect to any such adjustments from rate increases, the Debt Service Coverage Ratio shall be not less than 1.00 of the current Fiscal Year’s Debt Service Requirements for all Utility Indebtedness.

The Issuer will, from time to time as often as necessary, in accordance with and subject to applicable legal requirements, revise the rates and charges aforesaid in such manner as may be necessary or proper so that the Net Revenues Available for Debt Service will be sufficient to cover the obligations under the provisions of the Bond Resolution. If in any Fiscal Year, Net Revenues Available for Debt Service are an amount less than as hereinbefore provided, the Issuer will make adjustments to such rates, fees and charges to bring the Utility into compliance with this covenant. It shall be the policy of the Issuer that the rates, fees and charges established for the Water Utility and the Sewer Utility shall each be sufficient to provide Net Revenues Available for Debt Service with respect to Utility Indebtedness issued for improvements to each such component of the Utility which meet the coverage requirements set forth herein to the extent reasonably practical.

Restrictions on Mortgage or Sale of Utility. The Issuer will not mortgage, pledge or otherwise encumber the Utility or any part thereof, nor will it sell, lease or otherwise dispose of the Utility or any material part thereof; provided, however, the Issuer may dispose of certain assets in accordance with the Bond Resolution.

Insurance. The Issuer will carry and maintain such reasonable amount of all risk insurance on all properties and all operations of the Utility as would be carried by a privately owned utility with similar property and performing similar functions, C-19 insofar as the properties are of an insurable nature; and in the event of loss or damage, the Issuer will use the Net Proceeds of such insurance to reconstruct or replace the damaged or destroyed property, or if such reconstruction or replacement be unnecessary, then such Net Proceeds shall be used in redeeming or paying off Outstanding Utility Indebtedness, in accordance with their call provisions. The Issuer also will carry general liability insurance in amounts not less than the then maximum liability of a governmental entity for claims arising out of a single occurrence, as provided by the State’s tort claims act or other similar future law (currently $500,000.00 per occurrence). In lieu of the foregoing, the Issuer may establish a self-insurance program which will provide substantially the same protection for the Owners.

Books, Records and Accounts. The Issuer will install and maintain proper books, records and accounts in accordance with general accounting principles which complete and correct entries will be made of all dealings and transactions of or in relation to the Utility. Such accounts shall show the amount of Gross Revenues, the application of such funds, and all financial transactions in connection therewith.

Annual Budget. Prior to the commencement of each Fiscal Year, the Issuer will cause to be prepared and filed with the Clerk and made available for public inspection, a budget setting forth the estimated receipts and expenditures of the Utility for the next succeeding Fiscal Year. Said annual budget shall be prepared in accordance with the requirements of the laws of the State and shall contain all information that is required by such laws.

Annual Audit. Annually, promptly after the end of the Fiscal Year, the Issuer will cause an audit to be made of the financial statements Utility for the preceding Fiscal Year by an Independent Accountant to be employed for that purpose and paid from the Gross Revenues. Said annual audit, which shall be completed within six-months after the end of such Fiscal Year, shall cover in reasonable detail the operation of the Utility during such Fiscal Year, and shall be filed with the Clerk and available for public inspection. As soon as possible after the completion of the annual audit, the Governing Body shall review the report of such audit, and if the audit report discloses that proper provision has not been made for all of the requirements of the Bond Resolution and the Act, the Issuer will promptly cure such deficiency and will within sixty (60) days proceed to modify the rates and charges to be charged for the use and services furnished by the Utility or take such other action as may be necessary to adequately provide for such requirements.

Report on Utility Condition. The Issuer shall annually cause a qualified employee of the Issuer to make an examination of and report on the condition and operations of the Utility. Not less than every three (3) years, the Issuer will cause the Consulting Engineers to make an examination and written report on the condition and operation of the Utility, such report to include recommendations as to any changes in such operation deemed desirable. Such report shall also make references to any unusual or extraordinary items of maintenance and repair and any extensions, enlargements or improvements that may be needed in the period prior to the preparation of the next consultant’s report required by this Section. A copy of such report will be filed with the Clerk.

DEFAULT AND REMEDIES

Remedies. The Bond Resolution and all of the provisions thereof shall constitute a contract between the Issuer, the Bond Insurer and each of the Owners of Utility Indebtedness, and any such Owner may by suit, action, mandamus, injunction or other proceeding, either at law or in equity, enforce and compel performance of all duties, obligations and conditions determined and required by the Bond Resolution, subject to the limitations of hereinafter set forth; provided however, that no Owner of Subordinate Indebtedness shall have the ability to impair the rights of Owners of Parity Indebtedness. Upon the happening and continuance of any Event of Default, then and in every such case any Owner may proceed, subject to the provisions of the Bond Resolution, to protect and enforce the rights of the Owners by a suit, action or special proceeding in equity, or at law, either for the specific performance of any covenant or agreement contained therein or in aid or execution of any power therein granted or for the enforcement of any proper legal or equitable remedy as such Owner shall deem most effectual to protect and enforce such rights.

Anything in the Bond Resolution to the contrary notwithstanding, if at any time moneys in the Principal and Interest Account shall not be sufficient to pay the interest on or the principal of the Utility Indebtedness as the same shall become due and payable, such moneys, together with any moneys then available or thereafter becoming available for such purpose, whether through the exercise of the remedies provided for in this Section or otherwise, shall be applied as follows:

(a) If the principal of all the Parity Indebtedness shall not have become due and payable, all such moneys shall be applied:

first: to the payment of the persons entitled thereto of all installments of interest then due and payable in the order in which such installments became due and payable, and, if the amount available shall not be sufficient to pay in full any particular installments, then to the payment, ratably, according to the

C-20 amounts due on such installment, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Parity Indebtedness;

second: to the payment to the persons entitled thereto of the unpaid principal of any of the Parity Indebtedness which shall have become due and payable (other than Parity Indebtedness called for redemption for the payment of which moneys are held pursuant to the provisions of the Bond Resolution), in the order of their due dates, with interest on the principal amount of such Parity Indebtedness at the respective rates specified therein from the respective dates upon which such Parity Indebtedness` became due and payable, and, if the amount available shall not be sufficient to pay in full the principal of the Parity Indebtedness due and payable on any particular date, together with such interest, then to the payment first of such interest, ratably, according to the amount of such interest due on such date, and then to the payment of such principal, ratably, according to the amount of such principal due on such date, to the persons entitled thereto without any discrimination or preference; and

third: to the payment of the interest on and the principal of the Parity Indebtedness, to the purchase and retirement of the Parity Indebtedness and to the redemption of the Parity Indebtedness, all in accordance with the provisions of the Bond Resolution.

(b) If the principal of all of the Parity Indebtedness shall have become due and payable, all such moneys shall be applied:

first: to the payment to the persons entitled thereto of all installments of interest due and payable on or prior to maturity, if any, in the order in which such installments became due and payable and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Parity Indebtedness, and then to the payment of any interest due and payable after maturity on the Parity Indebtedness, ratably, to the person entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Parity Indebtedness; and

second: to the payment of the principal of the Parity Indebtedness, ratably, to the persons entitled thereto, without preference or priority of any Parity Indebtedness over any other Parity Indebtedness.

(c) If the principal of all the Subordinate Indebtedness shall not have become due and payable, all such moneys shall be applied:

first: to the payment of the persons entitled thereto of all installments of interest then due and payable in the order in which such installments became due and payable, and, if the amount available shall not be sufficient to pay in full any particular installments, then to the payment, ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Subordinate Indebtedness;

second: to the payment to the persons entitled thereto of the unpaid principal of any of the Subordinate Indebtedness which shall have become due and payable (other than Subordinate Indebtedness called for redemption for the payment of which moneys are held pursuant to the provisions of the Bond Resolution), in the order of their due dates, with interest on the principal amount of such Subordinate Indebtedness at the respective rates specified therein from the respective dates upon which such Subordinate Indebtedness` became due and payable, and, if the amount available shall not be sufficient to pay in full the principal of the Subordinate Indebtedness due and payable on any particular date, together with such interest, then to the payment first of such interest, ratably, according to the amount of such interest due on such date, and then to the payment of such principal, ratably, according to the amount of such principal due on such date, to the persons entitled thereto without any discrimination or preference; and

third: to the payment of the interest on and the principal of the Subordinate Indebtedness, to the purchase and retirement of the Subordinate Indebtedness and to the redemption of the Subordinate Indebtedness, all in accordance with the provisions of the Bond Resolution.

(d) If the principal of all of the Subordinate Indebtedness shall have become due and payable, all such moneys shall be applied:

first: to the payment to the persons entitled thereto of all installments of interest due and payable C-21 on or prior to maturity, if any, in the order in which such installments became due and payable and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Subordinate Indebtedness, and then to the payment of any interest due and payable after maturity on the Subordinate Indebtedness, ratably, to the person entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Subordinate Indebtedness; and

second: to the payment of the principal of the Subordinate Indebtedness, ratably, to the persons entitled thereto, without preference or priority of any Subordinate Indebtedness over any other Subordinate Indebtedness.

Whenever moneys are to be applied by the Issuer pursuant to the foregoing provisions, such moneys shall be applied at such times, and from time to time, as the Director of Finance, in his or her sole discretion shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future; the deposit of such moneys with the Paying Agent in trust for the proper purpose shall constitute proper application by the Issuer; and the Issuer shall incur no liability whatsoever to any Owner or to any other person for any delay in applying any such moneys, so long as the Issuer acts with reasonable diligence, having due regard to the circumstances, and ultimately applies the same in accordance with such provisions of this Resolution as may be applicable at the time of application by the Director of Finance. Whenever the Director of Finance shall exercise such discretion in applying such moneys, she shall fix the date (which shall be an Interest Payment Date unless she shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Director of Finance shall give such notice as she may deem appropriate of the fixing of any such date, and shall not be required to make payment to the Owner of any unpaid Utility Indebtedness until the same shall be surrendered to the Paying Agent for appropriate endorsement, or for cancellation if fully paid.

In case any proceeding taken by any Owner on account of any default shall have been discontinued or abandoned for any reason, then and in every such case the Issuer and the Owners shall be restored to their former positions and rights hereunder, respectively, and all rights and remedies of the Owners shall continue as though no such proceedings had been taken. No Owner of any of any Utility Indebtedness shall have any right in any manner whatever to affect, disturb or prejudice the security of the Bond Resolution or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Owners of the same class of Utility Indebtedness. No remedy herein conferred on the Owners is intended to be exclusive of any other remedy or remedies, and each and every remedy conferred shall be cumulative and shall be in addition to every other remedy given hereunder and under the Act or now or hereafter existing at law or in equity or by statute. No delay or omission of any Owner to exercise any right or power accruing upon any default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given to the Owners may be exercised from time to time and as often as may be deemed expedient.

Limitation on Rights of Owners. No Owner of any Utility Indebtedness shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of the Bond Resolution or for the execution of any trust hereunder or for the appointment of a receiver or any other remedy hereunder, unless (a) an Event of Default shall have occurred, (b) the Owners of twenty-five percent (25%) in aggregate principal amount of same class of the Utility Indebtedness then Outstanding shall have made written request to the Issuer, shall have offered it reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name, and (ci) the Issuer shall thereafter fail or refuse to exercise the powers herein granted or to institute such action, suit or proceeding in its own name; and such notification, request and offer of indemnity are hereby declared in every case, at the option of the Issuer, to be conditions precedent to the execution of the powers and trusts of the Bond Resolution, and to any action or cause of action for the enforcement of the Bond Resolution, or for the appointment of a receiver or for any other remedy hereunder, it being understood and intended that no one or more Owners of the Utility Indebtedness shall have any right in any manner whatsoever to affect, disturb or prejudice the Bond Resolution by its, his or their action or to enforce any right hereunder except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the equal benefit of the Owners of the Utility Indebtedness then Outstanding. Nothing in the Bond Resolution contained shall, however, affect or impair the right of any Owner to payment of Debt Service Requirements on any Utility Indebtedness at and after the maturity thereof or the obligation of the Issuer to pay the Debt Service Requirements on each of the Utility Indebtedness issued hereunder to the respective Owners thereof at the time, place, from the source and in the manner herein and in the Utility Indebtedness expressed.

Remedies Cumulative. No remedy conferred upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies C-22 thereon. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the Issuer and the Owners shall be restored to their former positions and rights, respectively, and all rights, remedies, powers and duties of the Owners shall continue as if no such suit, action or other proceedings had been brought or taken.

No Obligation to Levy Taxes. Nothing contained in the Bond Resolution shall be construed as imposing on the Issuer any duty or obligation to levy any taxes either to meet any obligation incurred herein or to pay the principal of or interest on the Utility Indebtedness.

DEFEASANCE

When any or all of the Utility Indebtedness, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in the Bond Resolution and the pledge of the Net Revenues hereunder and all other rights granted hereby shall terminate with respect to the Bonds or scheduled interest payments thereon so paid and discharged. Utility Indebtedness, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of the Bond Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Utility Indebtedness or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the principal or Redemption Price of said Utility Indebtedness and/or interest accrued to the Stated Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any Bonds, no such satisfaction shall occur until: (a) the Issuer has elected to redeem such Utility Indebtedness, and (b) either notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Bond Registrar to give such notice of redemption in compliance with the Bond Resolution. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the Issuer, for the purpose of paying and discharging any of the Utility Indebtedness, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Utility Indebtedness, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions of the Bond Resolution. The Issuer shall notify the Bond Insurer of any defeasance of any Insured Bonds insured by the Bond Insurer.

Notwithstanding anything in the Bond Resolution to the contrary, in the event that the principal and/or interest due on the Insured Bonds shall be paid by the Bond Insurer pursuant to the Bond Insurance Policy, the Insured Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer and the covenants, agreements and other obligations of the Issuer to the Owners shall continue to exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of such Owners.

TAX COVENANTS

General Covenants. The Issuer covenants and agrees that it will comply with: (a) all applicable provisions of the Code necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Series 2021A Bonds; and (b) all provisions and requirements of the Federal Tax Certificate. The Issuer will adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Series 2021A Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the Issuer.

Survival of Covenants. The covenants contained in this Article and in the Federal Tax Certificate shall remain in full force and effect notwithstanding the defeasance of the Series 2021A Bonds pursuant to the Series 2021A Bond Resolution until such time as is set forth in the Federal Tax Certificate.

CONTINUING DISCLOSURE REQUIREMENTS

Disclosure Requirements. In the Bond Resolution the Issuer covenants with the Purchaser and the Beneficial Owners to provide and disseminate such information as is required by the SEC Rule and as further set forth in the Disclosure Undertaking and to make the provisions of the Disclosure Undertaking applicable to the Utility Indebtedness. Such covenant shall be for the benefit of and enforceable by the Purchaser and the Beneficial Owners.

Failure to Comply with Continuing Disclosure Requirements. In the event the Issuer fails to comply in a timely manner with its continuing disclosure covenants contained in the Bond Resolution, the Purchaser and/or any Beneficial Owner may make demand for such compliance by written notice to the Issuer. In the event the Issuer does not remedy such C-23 noncompliance within 10 days of receipt of such written notice, the Purchaser or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement or for the enforcement of any other appropriate legal or equitable remedy, as the Purchaser and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the Issuer under such preceding section. Notwithstanding any other provision of the Bond Resolution, failure of the Issuer to comply with its continuing disclosure covenants contained in the Bond Resolution shall not be considered an Event of Default under the Bond Resolution.

MISCELLANEOUS PROVISIONS

Amendments. The rights and duties of the Issuer and the Owners, and the terms and provisions of the Series 2021A Bonds or of the Series 2021A Bond Resolution, may be amended or modified at any time in any respect by resolution of the Issuer with the written consent of the Owners of not less than a majority in principal amount of the Series 2021A Bonds then Outstanding. No such modification or alteration shall:

(a) extend the maturity of any payment of principal or interest due upon any Series 2021A Bond; (b) effect a reduction in the amount which the Issuer is required to pay as principal of or interest on any Series 2021A Bond; (c) permit preference or priority of any Series 2021A Bond over any other Series 2021A Bond; (d) reduce the percentage in principal amount of Series 2021A Bonds required for the written consent to any modification or alteration of the provisions of the Series 2021A Bond Resolution; or (e) permit the creation of a lien on the Revenues prior or equal to the lien of the Parity Indebtedness.

Any provision of the Series 2021A Bonds or of the Series 2021A Bond Resolution may, however, be amended or modified by resolution duly adopted by the governing body of the Issuer at any time in any legal respect with the written consent of the Owners of all of the Series 2021A Bonds at the time Outstanding.

Without notice to or the consent of any Owners, the Issuer may amend or supplement the Series 2021A Bond Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to more precisely identify the Project, to reallocate proceeds of the Series 2021A Bonds among Projects, to provide for a Substitute Project, to conform the Series 2021A Bond Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners.

Every amendment or modification of the provisions of the Series 2021A Bonds or of the Series 2021A Bond Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution adopted by the governing body of the Issuer amending or supplementing the provisions of the Series 2021A Bond Resolution and shall be deemed to be a part of the Series 2021A Bond Resolution. A certified copy of every such amendatory or supplemental resolution, if any, and a certified copy of the Series 2021A Bond Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Series 2021A Bond or a prospective purchaser or owner of any Series 2021A Bond authorized by the Series 2021A Bond Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental resolution or of the Series 2021A Bond Resolution will be sent by the Clerk to any such Owner or prospective Owner.

Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the resolution of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Series 2021A Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Series 2021A Bonds any reference to such amendment or modification.

The Issuer shall furnish to the Paying Agent a copy of any amendment to the Series 2021A Bonds or the Series 2021A Bond Resolution which affects the duties or obligations of the Paying Agent under the Series 2021A Bond Resolution.

Notices, Consents and Other Instruments by Owners. Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing.

Inconsistent Provisions. In case any one or more of the provisions of the Series 2021A Bond Resolution or of the Utility Indebtedness issued hereunder shall for any reason be inconsistent with the provisions of the Outstanding Parity Bond Resolutions or the Parity Indebtedness: (a) the provisions of any Outstanding Parity Bond Resolution adopted prior to the Series 2021A Bond Resolution shall prevail with respect to Parity Indebtedness issued prior in time, so long as such Parity Indebtedness is Outstanding; and (b) the provisions of the Series 2021A Bond Resolution shall prevail with respect to any

C-24 Parity Bond Resolution adopted subsequent to the Series 2021A Bond Resolution, so long as any Parity Indebtedness issued under the Series 2021A Bond Resolution is Outstanding.

Electronic Transactions. The issuance of the Series 2021A Bonds and the transactions related thereto and described herein may be conducted and documents may be stored by electronic means.

Governing Law. The Bond Resolution shall be governed exclusively by and construed in accordance with the applicable laws of the State.

THE DISCLOSURE UNDERTAKING

The Issuer has adopted a Continuing Disclosure Undertaking, dated as of June 10, 2021, which will apply solely to the Series 2021A Bonds (the “Disclosure Undertaking”) in which the Issuer covenants to provide certain financial and other information with respect to the Series 2021A Bonds, in order to assist the Participating Underwriter in complying with the provisions of the SEC Rule. Such covenants are for the benefit of and enforceable by the Participating Underwriter and the Beneficial Owners. The Issuer is the only “obligated person” with responsibility for continuing disclosure with respect to the Series 2021A Bonds. Such summary does not purport to be complete and is qualified in its entirety by reference to the foregoing documents.

DEFINITIONS

In addition to the definitions set forth in this “APPENDIX C – THE BOND RESOLUTION – Definitions” unless otherwise defined herein, the following capitalized terms shall have the following meanings:

“Annual Report” means any Annual Report filed by the Issuer pursuant to, and as described in the Disclosure Undertaking, which may include the Issuer's Comprehensive Annual Financial Report, so long as such report contains the Financial Information and Operating Data.

“Beneficial Owner” means, with respect to any Utility Indebtedness, any registered owner of any Utility Indebtedness of such series and any person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Utility Indebtedness (including persons holding Utility Indebtedness through nominees, depositories or other intermediaries); or (b) is treated as the owner of any Utility Indebtedness of such series for federal income tax purposes.

“Designated Agent” means Gilmore & Bell, P.C. or one or more other entities designated in writing by the Issuer to serve as a designated agent of the Issuer for purposes of the Disclosure Undertaking.

“Dissemination Agent” means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to the Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation.

“EMMA” means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org.

“Financial Information” means the financial information of the Utility described under the heading “PROVISION OF ANNUAL REPORTS – Financial Information.”

“Financial Obligation” means a: (a) debt obligation; (b) a derivative instrument entered into in connection with, or pledged as security or source of payment for, an existing or planned debt obligation; or (c) a guarantee of (a) or (b) hereof; provided however, the term Financial Obligation shall not include a municipal security as to which a final official statement has been provided to the MSRB consistent with the SEC Rule.

“Material Events” means any of the events listed under the heading “REPORTING OF MATERIAL EVENTS.”

“MSRB” means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the SEC Rule.

“Official Statement” means collectively the Issuer's Official Statement(s) for each series of Utility Indebtedness, including all appendices and exhibits thereto.

“Operating Data” means the operating data of the Utility described under the heading “PROVISION OF ANNUAL REPORTS – Operating Data.”

C-25 “Participating Underwriter” means each of the original underwriters of any Utility Indebtedness required to comply with the SEC Rule in connection with the offering of such Utility Indebtedness.

“Repository” means the MSRB via EMMA.

“SEC” means the Securities and Exchange Commission of the United States.

PROVISION OF ANNUAL REPORTS

The Issuer shall, or shall cause the Dissemination Agent to, not later than June 30 of each year, commencing with the Issuer’s Fiscal Year ended in 2020, file with the Repository the Issuer's Annual Report, consisting of the Financial Information and Operating Data, which may be contained in the City’s Comprehensive Annual Financial Report, described as follows:

Financial Information. The audited financial statements of the Utility for such prior Fiscal Year, prepared in accordance with generally accepted auditing standards, in substantially the format contained in Appendix B to the Official Statement. If audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain summary unaudited financial information and the audited financial statements shall be filed in the same manner as the Annual Report promptly after they become available. The accounting basis and the method of preparation of the financial statements of the Utility are contained in Appendix B to the Official Statement. The method of preparation and basis of accounting of the Financial Information may not be changed to a basis less comprehensive than contained in the Official Statement, unless the Issuer provides notice of such change in the same manner as for a Material Event.

Operating Data. Updates as of the end of the Fiscal Year of certain financial information and operating data described in that portion of the Official Statement entitled “THE WATER AND SEWER UTILITY – Bonded Indebtedness” and “THE WATER AND SEWER UTILITY – Operating and Financial Data” (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer).

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an “obligated person” (as defined by the SEC Rule), which have been filed with the Repository, the MSRB or the SEC. If the document included by reference is a final official statement, it must be available from the Repository. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audit report and accompanying financial statements may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event.

If the Annual Report is not filed within the time period specified herein, the Issuer shall send a notice to the Repository in a timely manner.

REPORTING OF MATERIAL EVENTS

No later than 10 Business Days after the occurrence of any of the following Material Events, the Issuer shall give, or cause to be given, to the Repository notice of the occurrence of any of the following Material Events with respect to the Series 2021A Bonds:

(1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions; the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Series 2021A Bonds, or other material events affecting the tax status of the Series 2021A Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Series 2021A Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer (which shall be deemed to occur as provided in the SEC Rule);

C-26 (13) the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional paying agent or trustee or the change of name of the paying agent or trustee, if material; (15) incurrence of a Financial Obligation of the Issuer, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Issuer, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Issuer, any of which reflect financial difficulties.

Notwithstanding the foregoing, notice of Material Events described in (8) and (9) need not be given any earlier than the notice (if any) of the underlying event is given to the Owners of affected Series 2021A Bonds pursuant to its authorizing documentation.

DISSEMINATION AGENT

General. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under the Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign as Dissemination Agent at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to the Disclosure Undertaking.

Annual Reports. If a Dissemination Agent shall be appointed, not later than 15 Business Days prior to the date specified for providing the Annual Report to the Repository, the Issuer shall provide the Annual Report to the Dissemination Agent or the Repository;. The Dissemination Agent shall file a report with the Issuer certifying that the Annual Report has been filed pursuant to the Disclosure Undertaking, stating the date it was filed, or that the Issuer has certified to the Dissemination Agent that the Issuer has filed the Annual Report with the Repository. If the Dissemination Agent has not received an Annual Report or has not received a written notice from the Issuer that it has filed an Annual Report to the Repository, by the date required in the Disclosure Undertaking, the Dissemination Agent shall send a notice to the Repository.

Material Event Notices.

(1) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Dissemination Agent from time to time, inform such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event.

(2) The Issuer will promptly respond in writing to any such request. Whenever the Issuer obtains knowledge of the occurrence of a Material Event, because of a notice from the Dissemination Agent or otherwise, the Issuer shall promptly determine if such event constitutes a Material Event and shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence. If the Issuer has determined that knowledge of an event is listed in (2), (7), (10) or (13) of the definition of a Material Event, is not material, the Issuer shall notify the Dissemination Agent in writing not to report the occurrence.

(3) If the Dissemination Agent has been given written instructions by the Issuer to report the occurrence of a Material Event, the Dissemination Agent shall file a notice of such occurrence with the Repository within 10 Business Days after the occurrence, with copies to the Issuer.

Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in the Disclosure Undertaking. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer.

Other Designated Agents. The Issuer may, from time to time, appoint or designate a Designated Agent to submit Annual Reports, Material Event notices, and other notices or reports pursuant to the Disclosure Undertaking. The Issuer hereby appoints the Dissemination Agent and the Designated Agent(s) solely for the purpose of submitting Issuer-approved Annual Reports, Material Event notices, and other notices or reports pursuant to the Disclosure Undertaking. The Issuer may revoke this designation at any time upon written notice to the Designated Agent.

C-27 MISCELLANEOUS PROVISIONS

Termination of Reporting Obligation. The Issuer's obligations under the Disclosure Undertaking for the Series 2021A Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of Series 2021A Bonds. If the Issuer's obligations hereunder are assumed in full by some other entity as permitted in the Bond Resolution, such person shall be responsible for compliance with under the Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or assumption occurs prior to the final maturity of such Series 2021A Bonds, the Issuer shall give notice of such termination or assumption in the same manner as for a Material Event.

Amendment; Waiver. The Issuer may amend and any other provision of the Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained therein, as so amended or after giving effect to such waiver, is in compliance with the SEC Rule and all current amendments thereto and interpretations thereof that are applicable to the Disclosure Undertaking. If a provision of the Disclosure Undertaking is amended or waived with respect to the Series 2021A Bonds pursuant to this paragraph, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements: (a) notice of such change shall be given in the same manner as for a Material Event; and (b) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

Additional Information. Nothing shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in the Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by the Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by the Disclosure Undertaking, the Issuer shall have no obligation under the Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event.

Noncompliance. In the event of a failure of the Issuer or the Dissemination Agent, if any, to comply with any provision of the Disclosure Undertaking with respect to the Series 2021A Bonds, any Participating Underwriter or any Beneficial Owner of the Series 2021A Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer or the Dissemination Agent, if any, as the case may be, to comply with its obligations under the Disclosure Undertaking. Noncompliance with the provisions of the Disclosure Undertaking shall not be deemed an Event of Default under the Bond Resolution or the Series 2021A Bonds, and the sole remedy under the Disclosure Undertaking in the event of any failure of the Issuer or the Dissemination Agent, if any, to comply with the Disclosure Undertaking shall be an action to compel performance.

Electronic Transactions. Actions taken under the Disclosure Undertaking and the arrangements described therein may be conducted and related documents may be stored by electronic means.

Beneficiaries. The Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Dissemination Agent, if any, each Participating Underwriter and Beneficial Owners from time to time with respect to the Series 2021A Bonds, and shall create no rights in any other person or entity.

Governing Law. The Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State.

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C-28 APPENDIX D

FORM OF BOND COUNSEL'S OPINIONS (THIS PAGE INTENTIONALLY LEFT BLANK)

APPENDIX D

FORM OF BOND COUNSEL OPINION – SERIES 2021A BONDS

GILMORE & BELL, P.C. Attorneys at Law 100 N. Main Suite 800 Wichita, Kansas 67202

June 10, 2021

Governing Body [Series 2021A Purchaser] City of Wichita, Kansas [Series 2021A Purchaser City, State]

Re: $36,715,000* Water and Sewer Utility Revenue Bonds, Series 2021A, of the City of Wichita, Kansas, Dated June 1, 2021

We have acted as Bond Counsel in connection with the issuance by the City of Wichita, Kansas (the “Issuer”), of the above-captioned bonds (the “Series 2021A Bonds”). In this capacity, we have examined the law and the certified proceedings, certifications and other documents that we deem necessary to render this opinion. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution adopted by the governing body of the Issuer prescribing the details of the Series 2021A Bonds.

Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify them by independent investigation.

Based upon the foregoing, we are of the opinion, under existing law, as follows:

1. The Issuer is a city of the first class with power to adopt the Series 2021A Bond Resolution, perform the agreements on its part contained therein, and issue the Series 2021A Bonds.

2. The Series 2021A Bonds have been duly authorized, executed and delivered by the Issuer and are valid and legally binding special obligations of the Issuer.

3. The Series 2021A Bonds are payable solely from the Net Revenues derived by the Issuer from the Issuer’s Water and Sewer Utility (the “Utility”). The Series 2021A Bonds do not constitute general obligations of the Issuer and do not constitute an indebtedness of the Issuer within the meaning of any constitutional or statutory provision, limitation or restriction. The taxing power of the Issuer is not pledged to the payment of the Series 2021A Bonds.

4. The Series 2021A Bond Resolution has been duly adopted by the Issuer and constitutes a valid and legally binding obligation of the Issuer enforceable against the Issuer. The Series 2021A Bond Resolution creates a valid lien on the Net Revenues pledged by the Series 2021A Bond Resolution for the security of the Series 2021A Bonds on a parity with any Parity Indebtedness issued or to be issued, as provided in the Series 2021A Bond Resolution.

5. The interest on the Series 2021A Bonds [(including any original issue discount properly allocable to an owner of a Series 2021A Bond)] is: (a) excludable from gross income for federal income tax purposes; and (b) not an item of tax preference for purposes of computing the federal alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”) that must be satisfied subsequent to the issuance of the Series 2021A Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Series 2021A Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2021A Bonds. The Series 2021A Bonds have not been designated as “qualified tax-exempt obligations” for purposes of Code § 265(b)(3). We express no opinion regarding other federal tax consequences arising with respect to the Series 2021A Bonds.

6. The interest on the Series 2021A Bonds is exempt from income taxation by the State of Kansas.

We express no opinion regarding the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Series 2021A Bonds (except to the extent, if any, stated in the Official Statement). Further, we express no opinion regarding the perfection or priority of the lien on the Net Revenues or other funds pledged under the Series 2021A Bond Resolution or tax consequences arising with respect to the Series 2021A Bonds other than as expressly set forth in this opinion. D-1 The rights of the owners of the Series 2021A Bonds and the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity.

This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion.

GILMORE & BELL, P.C.

D-2

APPENDIX E

LIST OF UTILITY IMPROVEMENTS

(THIS PAGE INTENTIONALLY LEFT BLANK) CITY OF WICHITA WATER AND SEWER UTILITY REVENUE BONDS, SERIES 2021A CAPITAL IMPROVEMENTS

MAJOR PROJECT PROJECT ORG PROJECT DESCRIPTION BOND AMOUNT

SEWER

1 S0M01 S0001 53200020 2020 Collection Mains Replacement $ 1,086,756

2 S0M02 S0018 53200220 2020 Lift Station Rehabilitation 170,137

3 S3000 53200313 S-025 SS Relocation Kellogg & Webb 47,401

4 S4000 53200514 S-037 Four Mile Plt Impr PH2 339,807

5 S6003 53200516 2016 Fairway Meadows Lagoon 921,086

6 S7M01 S7001 53200017 2017 Collection Mains Replacement 1,045,822

7 S7M02 S7008 53200117 2017 Sewer Mains for Future Development 37,934

8 S7M00 S7002 53200217 2017-2018 Lift Station Rehab 1,108,223

9 S8M00 S8002 53200118 2018 Sewer Mains for Future Development 901,152

10 S8M01 S8004 53200018 2018 Collection Mains Replacement 1,421,563

11 S8008 53201718 Plant 1 Headworks Rehab 1,736,903

12 S8021 53201818 Sewer Relocation I-135, Blake-Indus 612,746

13 S8032 53201618 SS Redbud, 127th - Founders Circle 806,817

14 S8035 53201918 FIber Network Cable - Plants 1 & 2 53,401

15 S9M00 S9002 53200119 2019 Sewer Mains for Future Development 1,306,294

16 S9M01 S9003 53200019 2019 Collection Mains Replacement 3,826,547

17 S9M02 S9029 53200219 2019 Lift Station Rehab 532,411

SUBTOTAL SEWER PROJECTS $ 15,955,000

WATER

1 W0010 54253920 2020 Well Rehabilitation $ 495,784

2 W0015 54254820 Hess Pump Station Site Valves Repla 55,848

3 W3000 54250713 2013 W-38 WL Kellogg & Webb 97,080

4 W5009 54251315 WTP Chemical Feed System Replacemen 60,848

5 W6003 54251716 WTP Roof Replacement & Wall Repairs 3,406,640

6 W7003 54252017 Cheney PS Strainer Replacements 67,848

7 W8006 54252518 WTP Lime Sludge Disposal System Imp 175,928

8 W8021 54252618 37th St Booster Pump Station Improv 638,096

9 W9004 54252919 Hess Pump Station Valves Replacemen 68,848

10 W9006 54253919 2019 Well Rehab 1,326,424

11 W9009 54254119 WTP Valve Actuators & Gears Replace 1,086,032

12 W9019 54254219 WTP Process Control Upgrades 325,856

13 W9021 54254419 Cheney Pipeline Parts Storage Build 115,696

14 W9022 54254519 Equus Wellfield Spurline Replacemen 295,624

E-1 CITY OF WICHITA WATER AND SEWER UTILITY REVENUE BONDS, SERIES 2021A CAPITAL IMPROVEMENTS

MAJOR PROJECT PROJECT ORG PROJECT DESCRIPTION BOND AMOUNT

15 W9027 54254619 WTP Hess Dehumidifiers Replacement $ 451,552

16 W0M00 W0004 54250320 2020 Arterial Water Mains 69,848

17 W0M01 W0001 54250020 2020 Distribution Mains Replacement 84,464

18 W0M02 W0002 54250120 2020 Water Mains for Future Development 110,080

19 W5M02 W5008 54250315 2015-2016 Arterial Water Mains 495,784

20 W6M00 W6001 54250016 2016 Distribution Mains Replacement 1,104,648

21 W6M01 W6000 54250116 2016 Water Mains for Future Development 297,624

22 W6M02 W6008 54250317 2017 Arterial Water Mains 898,488

23 W7M01 W7001 54250117 2017 Water Mains for Future Development 586,248

24 W7M02 W7002 54250217 2017 Dead End Mains Elimination 88,464

25 W8M00 W8001 54250018 2018 Distribution Mains Replacement 1,190,112

26 W8M01 W8002 54250118 2018 Water Mains for Future Development 451,552

27 W9M00 W9000 54250019 2019 Distribution Mains Replacement 738,176

28 W9M02 W9003 54250319 2019 Arterial Water Mains 2,188,680

29 W7M00 2017 Distribution Mains Replacement 2,834,392

30 W8M02 W8003 54250218 2018 Dead End Mains Elimination 953,336

SUBTOTAL WATER PROJECTS $ 20,760,000

TOTAL SERIES 2021A $ 36,715,000

E-2

APPENDIX F

ENGINEER’S REPORT AND FEASIBILITY STUDY

(THIS PAGE INTENTIONALLY LEFT BLANK)

April 8, 2021

Water & Sewer Utility City of Wichita 455 North Main Street, 8th Floor Wichita, Kansas 67202-1677

Re: Consulting Engineer’s Report

Ladies and Gentlemen:

In accordance with our agreement with the City of Wichita, Kansas (the City), Burns & McDonnell Engineering Company, Inc. (Burns & McDonnell) submits this Consulting Engineer’s Report (Report). This Report has been prepared in connection with the issuance of $36,715,000 Water and Sewer Utility Revenue Bonds, Series 2021A (The Series 2021A Bonds). Of this amount, approximately $20,760,000 is for water projects and $15,955,000 is for sewer projects. This report also includes the draw of not-to-exceed $40,000,000 (the “WIFIA Draw”) from the City’s Taxable Water and Sewer Utility Revenue Bond, Series 2020B (the “WIFIA Bond,” and with the Series 2021A Bonds, the “Bonds”) pursuant to the Maximum Annual Disbursement Certificate to be executed in connection with draws on the WIFIA Bond. The purpose of this Report is to present our findings concerning debt service coverage requirements for the issuance of additional bonds as described in the Bond Ordinance.

In conducting our studies, Burns & McDonnell has made such investigations and reviews of the facilities, books, records, and capital improvement programs of the Wichita Water and Sewer System (the Utility) and other investigations, as we deemed necessary. Revenues and revenue requirements for the Utility are presented in this Report for the historical three-year period ending December 31, 2019 and a projected five-year period ending December 31, 2024. This Report concludes with a summary of our major opinions regarding the Utility. In preparing our summary of historical information and forecasts and in forming an opinion of the debt service coverage summarized in this Report, Burns & McDonnell has made certain assumptions with respect to conditions, events, and circumstances which may occur in the future. Such assumptions and methodologies are summarized in this letter and are reasonable and appropriate for the purpose for which they are used. While Burns & McDonnell believes the assumptions are reasonable and the methodology valid, actual results may differ materially from those forecasted, as influenced by the conditions, events, and circumstances which actually occur. Debt service payments for the Bonds were provided by the City and prepared by Piper Sandler & Co.

The Utility staff provided historical data presented in this Report and the Comprehensive Annual Financial Reports prepared for the City. Burns & McDonnell reviewed and discussed this data with the Utility. Burns & McDonnell has prepared summary tables presenting the overall debt service coverage for the combined water and sewer systems which are found later in this Report.

Burns & McDonnell Engineering Company, Inc. 9400 Ward Parkway \ Kansas City, MO 64114 O 816-333-9400 \ F 816-333-3690 \ burnsmcd.com F-1 Water & Sewer Utility City of Wichita April 8, 2021 Page 2

SYSTEM DESCRIPTION The City currently owns and operates the water and sewer systems. The Utility serves customers within the City limits and in outlying areas. It supplies and distributes high quality potable water, and collects and treats wastewater for the City. Services provided include pumping and purifying water, maintaining the water distribution and wastewater collection systems, treating wastewater, managing facilities, and planning for future needs.

UTILITY ORGANIZATION The water and sewer utility systems operate independently of one another, with separate funding accounts. As a general statement, Burns & McDonnell found the Utility to be well-run, to have developed resources for future requirements, and to operate in a businesslike manner.

The City conducted a comprehensive financial plan, cost of service, and rate study in 2015, which forms the basis for the existing rates. The model developed in association with the 2015 study has been periodically updated and maintained. The City conducts long term financial planning as part of its annual budgeting process and has demonstrated a willingness to implement rate adjustments necessary to meet its financial obligations.

The Utility’s organizational structure is sound, and personnel are well prepared to keep the water and sewer systems operating in a reliable manner. Utility personnel are a part of the City Public Works & Utilities (PW&U) Department. The current Utility organization is depicted within the PW&U Department in Figure 1. Within the current organizational structure, divisions that have direct involvement with Utility operations and support functions include Water Production, Sewage Treatment, Sewer Maintenance, Water Distribution, Utilities Optimization and PW&U Business Section.

The Water Production Division monitors the raw water supply in the Equus Beds Wellfield, Cheney Reservoir, and the local wellfields. The Water Production Division also operates and maintains the delivery system that transports the raw water to the main water treatment plant. Additionally, the Water Production Division operates and maintains the main water treatment plant, with a rated treatment capacity of 160 million gallons per day (MGD), which cleans, purifies and softens the water to meet or exceed all federal drinking water standards.

The Water Production Division also operates and maintains the Phase II Aquifer Storage & Recovery (ASR) Surface Water Treatment Plant which is capable of collecting 30 MGD of raw water from the Little Arkansas River, treating it to drinking water standards, and injecting it into the Equus Beds Wellfield for future raw water supply. Finally, the Water Production Division is responsible for pumping finished water into the system and maintaining adequate water pressure

F-2 Water & Sewer Utility City of Wichita April 8, 2021 Page 3

throughout the service area, using several pump stations as well as ground and elevated storage reservoirs. Figure 1

DEPARTMENT OF PUBLIC WORKS & UTILITIES City of Wichita, Kansas

The Sewage Treatment Division treats approximately 40 million gallons per day of sewage at its four National Pollutant Discharge Elimination System permitted facilities.

The Sewer Maintenance Division operates and maintains a sanitary sewer gravity collection system of over 2,000 miles that transports wastewater from customers to treatment plants.

The Water Distribution Division operates and maintains a pipe network of over 2,400 miles that transports potable water from the Water Treatment Plant to customers in an approximate 200 square mile area, both inside and outside the City.

The Utilities Optimization Division evaluates risk, asset, and staffing management of the water and sewer utilities in order to establish a long-term investment strategy.

F-3 Water & Sewer Utility City of Wichita April 8, 2021 Page 4

The PW&U Business Section provides direction and service for the Utility and the Public Works department. It oversees the financial activity of the Utility as well as customer billing, revenue tracking, bond issuance, and debt coverage ratio projections.

SYSTEM CONDITION Water Utility System Burns & McDonnell found the water utility system to be in generally good condition. The design and operation of the system is acceptable and conforms to general accepted engineering standards. A strategic plan to meet future water demands and regulatory requirements has been prepared for the system. A ten-year capital improvement plan has been developed and is annually revised, updated, and prioritized. Major projects in the plan include replacement of existing water mains; construction of new water mains for future development; various drought mitigation projects; Cheney Dam resurfacing; and local wellfield improvements. A new water treatment plant is also under construction and is expected to be complete by the fall of 2024.

Sewer Utility System In general, Burns & McDonnell considers the sewer utility system to be in good condition and to be performing as designed. The design and operation of the system is acceptable and conforms to general accepted engineering standards. A strategic plan to meet future wastewater demands and regulatory requirements has been prepared for the system. A ten-year capital improvement plan has been developed and is annually revised, updated, and prioritized. Major projects included in the capital improvement plan over the next few years include a program to rehabilitate or replace existing sewer mains; construction of new sewer mains to serve new development; and relocation of a major sanitary sewer line passing under an interstate highway. The City is also in the preliminary design stage of its biological nutrient removal project.

The Utility performed an update to both their water supply master plan and sanitary sewer master plan in 2017. These master plans provide strategic direction for improvements in both systems to sustain their performance over time.

PURPOSE OF THE BONDS The Bonds are being issued for the purpose of covering costs associated with a number of capital projects that are partially or fully complete. These projects are proceeding on schedule and no problems are currently anticipated that would keep the Utility from completing the desired work. Projects include water main and sanitary sewer main rehabilitations and replacements and facility and equipment replacement at the City’s water and sewer treatment plants.

F-4 Water & Sewer Utility City of Wichita April 8, 2021 Page 5

FINANCIAL FEASIBILITY FOR THE BONDS The financial data used in the analysis presented herein was obtained from the financial records of the Utility. The 2017, 2018 and 2019 financial reports have been audited by Allen, Gibbs & Houlik, L.C., Certified Public Accountants and are maintained in conformity with generally accepted accounting principles for governmentally owned water utilities.

SALES REVENUES Sales revenue of the Utility is derived primarily from water sales and treatment of sewage flows. Annual water customers, sales and sales revenues for the historical period 2017 through 2019 are presented in Table 1. The number of water customers has increased from 2017 to 2019. Total water sales revenue was $81.0 million in 2017, $85.6 million in 2018, and $82.4 million in 2019. Water revenues reflect rate increases which became effective on January 1 of 2017 and 2018. Revenues decreased in 2019 due to a delayed rate increase of five percent effective February 1, 2019, lower water usage and a transition to a new billing system, which suspended shut offs for non-payment.

Annual sewer customers and sales revenues for the historical period 2017 through 2019 are presented in Table 2. Total sewer sales revenue was $57.4 million in 2017, $62.3 million in 2018, and $70.0 million in 2019. The sewer revenues reflect rate increases which became effective on January 1 of 2017 and 2018 and February 1 of 2019.

Projected water customers, sales, and sales revenues are presented in Table 3. Unaudited year- end financials are shown for 2020. For this Report, customer counts were assumed to increase slightly from 2020 totals throughout the forecast period for residential, commercial/industrial, fire protection and contract customers. All other customer classes were projected to remain at 2020 levels. Water volume sales were impacted in 2020 by the COVID pandemic. As can be seen in Table 3, residential and wholesale volumes were higher than usual while commercial/industrial volumes were lower. Assuming the impact of COVID-19 subsides in 2021, residential water volume sales were forecasted to decrease in 2021 then increase slightly from 2022 through 2024. Commercial/industrial water volume sales were forecasted to increase in 2021, representing a more normal year, then continue to increase slightly from 2022 through 2024. Wholesale water volume sales were also forecast to decrease in 2021 then remain constant throughout the forecast period.

Water sales revenues for the water utility system are estimated to be $96.6 million in 2020. Water volume revenues are projected to increase slightly annually throughout the forecast period due to the increase in customers and overall increase in water sales. Revenues increase in 2021 due to a rate increase of 6.5 percent effective January 1, 2021. Water volume revenues are projected to be approximately $101.6 million in 2024.

F-5 Water & Sewer Utility City of Wichita April 8, 2021 Page 6

Table 1

HISTORICAL WATER CUSTOMERS, SALES, AND REVENUES Year Ended December 31 City of Wichita, Kansas

Customers

Customer Classification 2017 2018 2019

Residential 135,636 134,438 135,309 Commercial/Industrial 12,290 13,598 13,727 Wholesale 13 13 14 Lawn Service 2,865 2,815 2,997 Fire Protection 1,581 1,591 1,650 Contract 345 341 342 Water Utility Uses 28 29 32 Total Customers 152,758 152,825 154,071

Water Sales - Million Gallons (1)

Residential 8,096 7,735 7,239 Commercial/Industrial 5,967 6,263 6,035 Wholesale 1,680 1,549 1,412 Contract 178 159 131 Other Sales 21 30 29 Estimated Leaks 214 103 12 Water Utility Uses 181 239 253 Unaccounted for Water 1,552 1,526 898 Total Sales 17,889 17,604 16,009

Water Sales Revenues (1)

Residential $ 47,869,172 $ 50,854,113 $ 49,747,195 Commercial/Industrial 24,449,653 26,938,608 25,355,680 Wholesale 5,507,926 5,420,698 5,043,229 Fire Protection 656,919 717,961 773,322 Contract 1,039,774 937,217 793,956 Backflow Charges 251,755 261,165 256,518 Bulk Sales 370,503 459,082 430,754 Other Fees and Charges 880,449 - - Total Sales Revenues $ 81,026,151 $ 85,588,844 $ 82,400,654

(1) Water and Sewer Utility revenue and sales volume data is based on actual billing information and excludes year-end accrual entries.

F-6 Water & Sewer Utility City of Wichita April 8, 2021 Page 7

Table 2

HISTORICAL SEWER CUSTOMERS AND REVENUES Year Ended December 31 City of Wichita, Kansas

Customers

Customer Classification 2017 2018 2019

Residential 126,128 126,879 127,831 Commercial 11,269 11,481 11,530 Industrial 18 9 7 Institutional 764 769 772 Wholesale 1 1 1 Extra Strength 9 15 16 Total Customers 138,189 139,154 140,157

Sewer Sales Revenues (1)

Residential $ 33,221,853 $ 35,302,348 $ 35,454,401 Commercial 15,837,983 22,192,410 24,469,969 Industrial 4,972,704 1,230,945 5,573,170 Institutional 1,011,515 1,128,092 1,085,475 Wholesale 397,588 363,692 464,823 Extra Strength 1,706,869 2,093,788 2,969,606 Bulk Sales 45,275 - - Other Fees and Charges 212,689 - - Total Sales Revenues $ 57,406,476 $ 62,311,275 $ 70,017,444

(1) Water and Sewer Utility revenue and sales volume data is based on actual billing information and excludes year-end accrual entries.

F-7 Water & Sewer Utility City of Wichita April 8, 2021 Page 8

Table 3

PROJECTED WATER CUSTOMERS, SALES, AND REVENUES Year Ended December 31 City of Wichita, Kansas

Customers

Customer Classification 2020 (1) 2021 2022 2023 2024

Residential 136,348 137,248 138,154 139,066 139,984 Commercial/Industrial 13,219 13,306 13,394 13,482 13,571 Wholesale 13 13 13 13 13 Lawn Service 3,171 3,171 3,171 3,171 3,171 Fire Protection 1,708 1,719 1,730 1,741 1,752 Contract 318 320 322 324 326 Water Utility Uses 32 32 32 32 32 Total Customers 154,809 155,809 156,816 157,829 158,849

Water Sales - Million Gallons (2)

Residential 8,213 7,793 7,840 7,900 7,950 Commercial/Industrial 5,516 6,188 6,230 6,270 6,310 Wholesale 1,640 1,420 1,420 1,420 1,420 Contract 159 160 160 160 160 Other Sales 23 23 23 23 23 Estimated Leaks (408) - - - - Water Utility Uses 303 300 300 300 300 Unaccounted for Water 1,028 1,030 1,030 1,030 1,030 Total Sales 16,474 16,913 17,003 17,103 17,193

Water Sales Revenues

Residential $ 61,212,280 $ 61,854,100 $ 62,230,400 $ 62,706,600 $ 63,103,500 Commercial/Industrial 26,193,175 29,699,100 29,901,700 30,093,700 30,285,600 Wholesale 6,531,588 5,545,300 5,545,300 5,545,300 5,545,300 Fire Protection 859,116 859,100 859,100 859,100 859,100 Contract 1,028,963 1,102,700 1,102,700 1,102,700 1,102,700 Backflow Charges 296,342 296,300 296,300 296,300 296,300 Bulk Sales 439,691 439,700 439,700 439,700 439,700 Other Fees and Charges - - - - - Total Sales Revenues $ 96,561,155 $ 99,796,300 $ 100,375,200 $ 101,043,400 $ 101,632,200

(1) 2020 data provided by the City, unaudited. (2) 2021 residential, commercial/industrial and wholesale water sales based on average of 2015 to 2019 water sales.

F-8 Water & Sewer Utility City of Wichita April 8, 2021 Page 9

Projected sewer customers sales revenues are presented in Table 4. Unaudited year-end financials are shown for 2020. In general, the sewer utility user charge revenues appear to be less impacted by COVID-19. For the purpose of this Report, customer counts were assumed to increase slightly from the 2020 totals throughout the forecast period for residential and commercial customers. All other customer classes were projected to remain at 2020 levels. Projected sewer sales revenues for the sewer utility system are $70.7 million in 2020. Sewer sales revenues are projected to be approximately $74.7 million in 2024. A FY2021 rate increase of 3.25 percent was implemented in January of 2021.

Table 4

PROJECTED SEWER CUSTOMERS AND REVENUES Year Ended December 31 City of Wichita, Kansas

Customers

Customer Classification 2020 (1) 2021 2022 2023 2024

Residential 129,598 130,453 131,314 132,181 133,053 Commercial 11,587 11,663 11,740 11,817 11,895 Industrial 7 7 7 7 7 Institutional 771 771 771 771 771 Wholesale 1 1 1 1 1 Extra Strength 16 16 16 16 16 Total Customers 141,980 142,911 143,849 144,793 145,743

Sewer Volume Revenues

Residential $ 37,732,214 $ 39,215,500 $ 39,474,400 $ 39,735,000 $ 39,997,100 Commercial 23,505,099 24,428,200 24,589,500 24,750,800 24,914,100 Industrial 5,532,144 5,711,900 5,711,900 5,711,900 5,711,900 Institutional 1,000,227 1,032,700 1,032,700 1,032,700 1,032,700 Wholesale 497,733 513,900 513,900 513,900 513,900 Extra Strength 2,477,158 2,557,700 2,557,700 2,557,700 2,557,700 Total Volume Revenues $ 70,744,575 $ 73,459,900 $ 73,880,100 $ 74,302,000 $ 74,727,400

(1) 2020 data provided by the City, unaudited.

F-9 Water & Sewer Utility City of Wichita April 8, 2021 Page 10

OPERATION AND MAINTENANCE EXPENSES Annual operation and maintenance expenses of the Utility for the historical period from 2017 through 2019 are presented in Table 5. These expenses consist of personal services, contractual services, materials and supplies, other, and administrative charges. The total water operation and maintenance expenses for the Utility for the historical period were $31.6 million in 2017, $29.7 million in 2018, and $32.3 million in 2019. The total sewer operation and maintenance expenses for the Utility for the historical period were $25.0 million in 2017, $26.6 million in 2018, and $28.9 million in 2019.

Table 6 presents unaudited actual operation and maintenance expenses for 2020 and projected operation and maintenance expenses for 2021 through 2024.

Operation and maintenance costs are projected to increase approximately 2.5 percent annually throughout the forecast period over 2020 levels. Total water operation and maintenance expenses are expected to increase from approximately $32.8 million in 2020 to approximately $36.3 million in 2024.

Overall sewer operation and maintenance costs are also projected to increase approximately 2.5 percent annually over 2020 levels. Total sewer operation and maintenance expenses are expected to increase from approximately $26.8 million in 2020 to approximately $29.6 million in 2024.

PROJECTED CASH FLOW The projected Utility cash flow is shown in Table 7. User charge revenues forecasted for each utility system are based on the projections shown previously on Tables 3 and 4. Other revenues include late payment penalties, account origination fees, and other miscellaneous charges. Investment earnings and cash capital contributions are consistent with historical levels. Total revenues for 2020 through 2024 are projected to increase slightly throughout the forecast period.

Operation and maintenance expenses are projected to increase as shown previously in Table 6.

Debt service for existing and proposed revenue bond debt issues is also shown in Table 7. Debt service related to the proposed Series 2021A revenue bonds was provided by the City and prepared by Piper Sandler & Co., initiating in 2021.

F-10 Water & Sewer Utility City of Wichita April 8, 2021 Page 11

Table 5

HISTORICAL OPERATION AND MAINTENANCE EXPENSES Year Ended December 31 City of Wichita, Kansas

Water Description 2017 2018 2019

Personal Services $ 12,024,528 $ 9,915,179 $ 12,236,883 Contractual Services 12,528,039 12,880,514 13,406,333 Materials and Supplies 5,351,412 4,588,356 4,421,370 Other 856,618 1,585,633 1,579,530 Administrative Charges 827,756 739,943 674,834 Total O&M Expenses $ 31,588,353 $ 29,709,625 $ 32,318,950

Sewer Description 2017 2018 2019

Personal Services $ 11,711,720 $ 11,901,536 $ 13,675,447 Contractual Services 8,470,808 8,903,378 9,686,941 Materials and Supplies 4,120,054 4,619,848 4,342,275 Other 423,999 905,413 871,296 Administrative Charges 314,741 302,174 333,526 Total O&M Expenses $ 25,041,322 $ 26,632,349 $ 28,909,485

F-11 Water & Sewer Utility City of Wichita April 8, 2021 Page 12

Table 6

PROJECTED OPERATION AND MAINTENANCE EXPENSES Year Ended December 31 City of Wichita, Kansas

Water Description 2020 (1) 2021 2022 2023 2024

Personal Services $ 11,533,100 $ 11,833,000 $ 12,140,700 $ 12,456,400 $ 12,780,300 Contractual Services 13,781,000 14,139,300 14,506,900 14,884,100 15,271,100 Materials and Supplies 5,191,900 5,326,900 5,465,400 5,607,500 5,753,300 Other 1,703,900 1,738,000 1,772,800 1,808,300 1,844,500 Administrative Charges 623,300 623,300 623,300 623,300 623,300 Total O&M Expenses 32,833,200 33,660,500 34,509,100 35,379,600 36,272,500

Sewer Description 2020 (1) 2021 2022 2023 2024

Personal Services $ 12,209,200 $ 12,526,700 $ 12,852,400 $ 13,186,600 $ 13,529,500 Contractual Services 8,967,300 9,200,500 9,439,700 9,685,100 9,936,900 Materials and Supplies 4,379,000 4,492,800 4,609,600 4,729,400 4,852,400 Other 853,200 875,400 898,200 921,600 945,600 Administrative Charges 355,900 355,900 355,900 355,900 355,900 Total O&M Expenses 26,764,600 27,451,300 28,155,800 28,878,600 29,620,300

(1) 2020 data provided by the City, unaudited.

F-12 Water & Sewer Utility City of Wichita April 8, 2021 Page 13

Table 7

PROJECTED CASH FLOW Year Ended December 31 City of Wichita, Kansas

Description 2020 2021 2022 2023 2024

Revenue from Water Sales $ 96,561,155 $ 99,796,300 $ 100,375,200 $ 101,043,400 $ 101,632,200 Revenue from Sewer Volumes 70,744,575 73,459,900 73,880,100 74,302,000 74,727,400 Other Revenues (1) 1,143,500 1,143,500 1,143,500 1,143,500 1,143,500 Investment Earnings (1) 1,473,600 1,473,600 1,473,600 1,473,600 1,473,600 Cash Capital Contributions (1) 3,765,000 3,765,000 3,765,000 3,765,000 3,765,000 Total Revenues 173,687,830 179,638,300 180,637,400 181,727,500 182,741,700

Operation and Maintenance Expenses $ 59,597,800 $ 61,111,800 $ 62,664,900 $ 64,258,200 $ 65,892,800

Outstanding Debt Service 41,913,400 45,992,800 45,826,900 45,763,400 40,202,200 Proposed Debt Service - 244,600 2,358,500 2,355,900 2,355,900 Total Debt Service 41,913,400 46,237,400 48,185,400 48,119,300 42,558,100

Total Operating Expenses 101,511,200 107,349,200 110,850,300 112,377,500 108,450,900

Annual Operating Balance $ 72,176,630 $ 72,289,100 $ 69,787,100 $ 69,350,000 $ 74,290,800

Debt Service Coverage Net Operating Revenues Available for Debt Service (2) $ 114,090,030 $ 118,526,500 $ 117,972,500 $ 117,469,300 $ 116,848,900 Annual Debt Service $ 41,913,400 $ 46,237,400 $ 48,185,400 $ 48,119,300 $ 42,558,100 Debt Service Coverage Based on Net Operating Revenues 2.72 2.56 2.45 2.44 2.75

Coverage including G.O. Indebtedness Net Operating Revenues Available for Debt Service (2) $ 114,090,030 $ 118,526,500 $ 117,972,500 $ 117,469,300 $ 116,848,900 Revenue and G.O. Debt Service (3) $ 51,543,800 $ 55,861,000 $ 57,798,500 $ 57,727,400 $ 52,156,000 Coverage Based on Net Operating Revenues 2.21 2.12 2.04 2.03 2.24

Coverage including City Payment Net Operating Revenues Available for Debt Service (2) $ 114,090,030 $ 118,526,500 $ 117,972,500 $ 117,469,300 $ 116,848,900 Total Debt Service and Payment to the City (4) $ 65,705,200 $ 70,626,700 $ 73,195,000 $ 73,835,500 $ 68,635,500 Coverage Based on Net Operating Revenues 1.74 1.68 1.61 1.59 1.70

(1) Based on unaudited 2019 levels of Other Revenues, Investment Earnings and Cash Capital Contributions. (2) Reflects Total Revenues less Operation and Maintenance Expenses. (3) Reflects Annual Debt Service plus G.O. Debt Service. (4) Reflects Annual Debt Service plus G.O. Debt Service plus Payment to the City.

F-13 Water & Sewer Utility City of Wichita April 8, 2021 Page 14

The Annual Operating Balance in Table 7 reflects Total Revenues less Total Operating Expenses. Table 7 shows the Annual Operating Balance is projected to range from a low of approximately $69.4 million in 2023 to a high of approximately $74.3 million in 2024. A positive Annual Operating Balance indicates operating expenses and debt service payments are projected to be fully funded throughout the study period.

On an annual basis, debt service coverage based on net operating revenues is anticipated to range from 2.44 to 2.75 during the forecast period, in excess of the minimum annual target of 1.20. Results in Table 7 do not include funding requirements for projects beyond those funded by the proposed Series 2021A revenue bonds. The Utility has indicated future recommended Utility revenue increases for 2022 to 2024 are anticipated to be approximately 5.0 percent annually. The City has demonstrated a willingness to implement rate adjustments necessary to meet its obligations and sustain the financial and operational integrity of the system.

In accordance with rate covenants, the City is also required to achieve a coverage ratio of at least 1.00 with respect to General Obligation (G.O.) Indebtedness and the Payment to the City. As shown in Table 7, projected coverage of the G.O. Indebtedness exceeds the minimum annual target, ranging from 2.03 to 2.24 during the forecast period. Projected coverage including the Payment to the City also exceeds the minimum annual target, ranging from 1.59 to 1.74 during the forecast period.

ADDITIONAL BOND COVERAGE REQUIREMENT The City may issue additional parity lien bonds for the Utility to finance extensions, enlargements and improvements only if and when the debt service coverage calculation as described in the Bond Ordinance (see excerpt below) equals or exceeds 120 percent:

“...the Debt Service Coverage Ratio for the two (2) Fiscal Years immediately preceding the issuance of such Utility Indebtedness, as reflected by information provided by the Independent Accountant, shall be not less than 1.20, including the Utility Indebtedness proposed to be issued. In the event that the Issuer has instituted any increase in rates for the use and services of the Utility and such increase shall not have been in effect during the full two (2) Fiscal Years immediately preceding the issuance of such proposed Utility Indebtedness, the additional Net Revenues Available for Debt Service which would have resulted from the operation of the Utility during said two (2) preceding Fiscal Years had such rate increase been in effect for the entire period may be added to the stated Net Revenues for the calculation of the Debt Service Coverage Ratio, provided that such estimated additional Net Revenues shall be determined by a Consultant.”

F-14 Water & Sewer Utility City of Wichita April 8, 2021 Page 15

The Debt Service Coverage Ratio is defined as:

“For any Fiscal Year: (a) with respect to the rate covenants, the ratio determined by dividing (i) a numerator equal to the Net Revenues Available for Debt Service for such Fiscal Year by (ii) a denominator equal the Debt Service Requirements for such Fiscal Year; and (b) with respect to Additional Indebtedness, the ratio determined by dividing (i) a numerator equal to the average Net Revenues Available for Debt Service for the two (2) prior Fiscal Years by (ii) a denominator equal to the Maximum Annual Debt Service; provided that with respect to Additional Indebtedness that are proposed to be Parity Indebtedness, Debt Service Requirements on Subordinate Lien Obligations and General Obligation Indebtedness shall be disregarded.”

COVERAGE Burns & McDonnell, acting as the consulting engineer, has completed an analysis of the debt service coverage. Based on our analysis, Burns & McDonnell believes the coverage covenant described above is fully met, both for the 2021A Bond issuance and the WIFIA Draw. The calculated coverage including the 2021A Bond issuance has been developed pursuant to the bond ordinance and is provided in summary in Table 8 and in additional detail in Table 9 of this Report. Tables 8a and 9a include the addition of WIFIA Draw.

The amounts shown for revenue and expenses are based on the average of actual 2018 and 2019 amounts for the water and sewer utility systems. Revenues have been adjusted to reflect rate increases adopted in subsequent periods. The Utility implemented an increase of 5.0 percent to water and an increase of 3.0 percent to sewer, which took effect on February 1, 2019. On January 1, 2020, the Utility implemented rate increases of 6.25 percent for water and 3.0 percent for sewer. On January 1, 2021, the Utility implemented rate increases of 6.5 percent for water and 3.25 percent for sewer.

The water and sewer service revenues for 2018 and 2019, as shown in Tables 9 and 9a and in more detail in Table 10, reflect the impact of revenue increases implemented in 2019, 2020 and 2021. These adjusted revenues were used to calculate debt coverage for the additional bonds coverage requirements.

Table 11 shows annual debt service for existing Utility bonds and the debt service for the proposed Series 2021A Bonds. The determination of maximum annual debt service of $48,185,331 occurs in 2022. Table 11a includes the addition of future estimated WIFIA Bond Payments resulting from the WIFIA Draw. The estimated principal and interest payment is $1,697,110, based on 1.17% interest, beginning in 2029. The maximum annual debt service, including the WIFIA Bond, is also $48,185,331 occurring in 2022.

F-15 Water & Sewer Utility City of Wichita April 8, 2021 Page 16

Table 8

ADDITIONAL BONDS TEST CALCULATION Year Ended December 31 City of Wichita, Kansas

Utility 2-Year Description Average

Revenues Water Sales $ 99,910,704 Sewer Charges for Service 69,263,708 Capital Contributions- Cash 3,923,443 Bond Premium Amortization 3,223,280 Other 1,131,291 Gain on Capital Assets 133,272 Investment Earnings 1,067,960 Total Revenues $ 178,653,658

Operation and Maintenance Expenses Personal Services $ 23,864,523 Contractual Services 22,438,583 Materials and Supplies 8,985,925 Other 2,470,936 Administrative Charges 1,025,239 Total Operation and Maintenance Expenses $ 58,785,206

Net Revenue Available for Debt Service $ 119,868,452

Maximum Annual Debt Service $ 48,185,331 (1)

Calculated Coverage 249% "Additional Bonds" Required Coverage 120%

(1) Determination of Maximum Annual Debt Service presented in Table 11.

F-16 Water & Sewer Utility City of Wichita April 8, 2021 Page 17

Table 8a

ADDITIONAL BONDS TEST CALCULATION Year Ended December 31 City of Wichita, Kansas

Utility 2-Year Description Average

Revenues Water Sales $ 99,910,704 Sewer Charges for Service 69,263,708 Capital Contributions- Cash 3,923,443 Bond Premium Amortization 3,223,280 Other 1,131,291 Gain on Capital Assets 133,272 Investment Earnings 1,067,960 Total Revenues $ 178,653,658

Operation and Maintenance Expenses Personal Services $ 23,864,523 Contractual Services 22,438,583 Materials and Supplies 8,985,925 Other 2,470,936 Administrative Charges 1,025,239 Total Operation and Maintenance Expenses $ 58,785,206

Net Revenue Available for Debt Service $ 119,868,452

Maximum Annual Debt Service $ 48,185,331 (1)

Calculated Coverage 249% "Additional Bonds" Required Coverage 120%

(1) Determination of Maximum Annual Debt Service presented in Table 11a.

F-17 Water & Sewer Utility City of Wichita April 8, 2021 Page 18

Table 9

ADDITIONAL BONDS: DETERMINATION OF 2-YEAR AVERAGE RESULTS Year Ended December 31 City of Wichita, Kansas

Water Water Sewer Sewer Utility 2-Year Description 2018 (1) 2019 (2) 2018 (1) 2019 (2) Average

Revenues Water Service Revenues (3) $ 103,873,692 $ 95,947,716 $ 99,910,704 Sewer Service Revenues (3) $ 68,386,105 $ 70,141,311 69,263,708 Capital Contributions- Cash 2,614,609 2,620,226 1,467,235 1,144,816 3,923,443 Bond Premium Amortization 1,687,513 2,178,673 1,122,500 1,457,873 3,223,280 Other 704,330 693,446 414,764 450,042 1,131,291 Gain on Capital Assets - 152,243 - 114,300 133,272 Investment Earnings 182,924 209,118 745,901 997,976 1,067,960 Total Revenues $ 109,063,068 $ 101,801,422 $ 72,136,505 $ 74,306,318 $ 178,653,658

Operation and Maintenance Expenses Personal Services $ 9,915,179 $ 12,236,883 $ 11,901,536 $ 13,675,447 $ 23,864,523 Contractual Services 12,880,514 13,406,333 8,903,378 9,686,941 22,438,583 Materials and Supplies 4,588,356 4,421,370 4,619,848 4,342,275 8,985,925 Other 1,585,633 1,579,530 905,413 871,296 2,470,936 Administrative Charges 739,943 674,834 302,174 333,526 1,025,239 Total Operation and Maintenance Expenses $ 29,709,625 $ 32,318,950 $ 26,632,349 $ 28,909,485 $ 58,785,206

Net Revenue Available for Coverage $ 79,353,443 $ 69,482,472 $ 45,504,156 $ 45,396,833 $ 119,868,452

Maximum Annual Revenue Bond Debt Service $ 48,185,331 (4)

Calculated Coverage for the Additional Bonds Test...... 249% Coverage Needed to Meet Additional Bonds Test ...... 120%

(1) Source: 2018 Comprehensive Annual Financial Report. (2) Source: 2019 Comprehensive Annual Financial Report. (3) Revenues are adjusted to reflect appropriate rate and customer charge adjustments, see Table 10. (4) Determination of Maximum Annual Debt Service presented in Table 11.

F-18 Water & Sewer Utility City of Wichita April 8, 2021 Page 19

Table 9a

ADDITIONAL BONDS: DETERMINATION OF 2-YEAR AVERAGE RESULTS Year Ended December 31 City of Wichita, Kansas

Water Water Sewer Sewer Utility 2-Year Description 2017 (1) 2018 (2) 2017 (1) 2018 (2) Average

Revenues Water Service Revenues (3) $ 103,873,692 $ 95,947,716 $ 99,910,704 Sewer Service Revenues (3) $ 68,386,105 $ 70,141,311 69,263,708 Capital Contributions- Cash 2,614,609 2,620,226 1,467,235 1,144,816 3,923,443 Bond Premium Amortization 1,687,513 2,178,673 1,122,500 1,457,873 3,223,280 Other 704,330 693,446 414,764 450,042 1,131,291 Gain on Capital Assets - 152,243 - 114,300 133,272 Investment Earnings 182,924 209,118 745,901 997,976 1,067,960 Total Revenues $ 109,063,068 $ 101,801,422 $ 72,136,505 $ 74,306,318 $ 178,653,658

Operation and Maintenance Expenses Personal Services $ 9,915,179 $ 12,236,883 $ 11,901,536 $ 13,675,447 $ 23,864,523 Contractual Services 12,880,514 13,406,333 8,903,378 9,686,941 22,438,583 Materials and Supplies 4,588,356 4,421,370 4,619,848 4,342,275 8,985,925 Other 1,585,633 1,579,530 905,413 871,296 2,470,936 Administrative Charges 739,943 674,834 302,174 333,526 1,025,239 Total Operation and Maintenance Expenses $ 29,709,625 $ 32,318,950 $ 26,632,349 $ 28,909,485 $ 58,785,206

Net Revenue Available for Coverage $ 79,353,443 $ 69,482,472 $ 45,504,156 $ 45,396,833 $ 119,868,452

Maximum Annual Revenue Bond Debt Service $ 48,185,331 (4)

Calculated Coverage for the Additional Bonds Test...... 249% Coverage Needed to Meet Additional Bonds Test ...... 120%

(1) Source: 2018 Comprehensive Annual Financial Report. (2) Source: 2019 Comprehensive Annual Financial Report. (3) Revenues are adjusted to reflect appropriate rate and customer charge adjustments, see Table 10. (4) Determination of Maximum Annual Debt Service presented in Table 11a.

F-19 Water & Sewer Utility City of Wichita April 8, 2021 Page 20

Table 10

REVENUE ADJUSTMENT DETERMINATION Year Ended December 31 City of Wichita, Kansas

Description 2018 2019

Total Water Sales Revenues $ 85,588,844 $ 82,400,654 Year End Accruals and Auditor's Adjustments 2,317,648 2,796,662 Total Water Sales Revenues 87,906,492 85,197,316 Other Adjustments February 1, 2019 Rate Increase Adjustment 4,243,400 - January 1, 2020 Rate Increase Adjustment 5,569,500 5,107,100 January 1, 2021 Rate Increase Adjustment 6,154,300 5,643,300 Total Adjusted Water Sales Revenues $ 103,873,692 $ 95,947,716

Total Sewer Sales Revenues $ 62,311,275 $ 70,017,444 Year End Accruals and Auditor's Adjustments 131,730 (4,320,433) Total Sewer Sales Revenues 62,443,005 65,697,011 Other Adjustments February 1, 2019 Rate Increase Adjustment 1,869,300 - January 1, 2020 Rate Increase Adjustment 1,925,400 2,100,500 January 1, 2021 Rate Increase Adjustment 2,148,400 2,343,800 Total Adjusted Sewer Sales Revenues $ 68,386,105 $ 70,141,311

Total Combined Adjusted Sales Revenue $ 172,259,797 $ 166,089,027

F-20 Water & Sewer Utility City of Wichita April 8, 2021 Page 21

Table 11

MAXIMUM ANNUAL DEBT SERVICE City of Wichita, Kansas

Existing Series 2021A TOTAL Water & Sewer Water and Sewer Water & Sewer Debt Service Debt Service Debt Service Payments (1) Payments (1) Payments

2019$ 38,876,949 $ - $ 38,876,949 2020 41,913,374 - 41,913,374 2021 45,992,824 244,649 46,237,473 2022 45,826,874 2,358,458 48,185,331 2023 45,763,424 2,355,858 48,119,281 2024 40,202,224 2,355,858 42,558,081 2025 40,357,474 2,358,258 42,715,731 2026 38,399,336 2,359,778 40,759,114 2027 37,046,026 2,354,308 39,400,334 2028 36,910,070 2,355,973 39,266,042 2029 32,143,439 2,359,583 34,503,021 2030 31,333,151 2,354,983 33,688,134 2031 25,786,791 2,357,170 28,143,961 2032 23,067,921 2,356,835 25,424,756 2033 19,785,368 2,358,908 22,144,275 2034 19,679,008 2,359,208 22,038,215 2035 14,386,981 2,362,695 16,749,676 2036 13,272,475 2,358,190 15,630,665 2037 11,736,888 2,357,825 14,094,713 2038 7,170,013 2,355,415 9,525,428 2039 7,061,806 2,360,915 9,422,721 2040 1,560,593 1,560,593

Maximum Annual Debt Service $ 48,185,331

(1) Debt service information provided by City.

F-21 Water & Sewer Utility City of Wichita April 8, 2021 Page 22

Table 11a

MAXIMUM ANNUAL DEBT SERVICE City of Wichita, Kansas

Existing Series 2021A TOTAL Water & Sewer Water and Sewer WIFIA Water & Sewer Debt Service Debt Service Debt Service SRF Loan Debt Service Payments (1) Payments (1) Payments (1)(2) Payments (1)(3) Payments

2019$ 38,876,949 $ - $ - $ - $ 38,876,949 2020 41,913,374 - - - 41,913,374 2021 45,992,824 244,649 - - 46,237,473 2022 45,826,874 2,358,458 - - 48,185,331 2023 45,763,424 2,355,858 - - 48,119,281 2024 40,202,224 2,355,858 - - 42,558,081 2025 40,357,474 2,358,258 - - 42,715,731 2026 38,399,336 2,359,778 - - 40,759,114 2027 37,046,026 2,354,308 - - 39,400,334 2028 36,910,070 2,355,973 - - 39,266,042 2029 32,143,439 2,359,583 1,697,110 - 36,200,131 2030 31,333,151 2,354,983 1,697,110 - 35,385,243 2031 25,786,791 2,357,170 1,697,110 - 29,841,071 2032 23,067,921 2,356,835 1,697,110 - 27,121,866 2033 19,785,368 2,358,908 1,697,110 - 23,841,385 2034 19,679,008 2,359,208 1,697,110 - 23,735,325 2035 14,386,981 2,362,695 1,697,110 - 18,446,786 2036 13,272,475 2,358,190 1,697,110 - 17,327,775 2037 11,736,888 2,357,825 1,697,110 - 15,791,822 2038 7,170,013 2,355,415 1,697,110 - 11,222,537 2039 7,061,806 2,360,915 1,697,110 - 11,119,831 2040 1,560,593 1,697,110 - 3,257,702

Maximum Annual Debt Service $ 48,185,331

(1) Debt service information provided by City. (2) Estimated level of principal and interest based on $40,000,000 draw at 1.17% interest rate. Payments continue through 2059. (3) The SRF loan will be a parity obligation; no amounts are yet outstanding.

F-22 Water & Sewer Utility City of Wichita April 8, 2021 Page 23

OPINIONS As a result of our investigations and analysis of the Utility’s records, the reviews, studies, and analyses we have discussed in this Report, and based upon our continuing studies of the Utility operations, it is Burns & McDonnell’s opinion that:

1. The Utility properties are and have been maintained, preserved, and generally kept in good working order and condition, and the City makes, as necessary, proper repairs, replacements, and renewals. 2. The assumptions used in preparing the additional bonds test calculation are reasonable. The debt service coverage covenant is fully met. 3. Based on the analysis included herein, the Utility can meet its existing debt service obligations including the obligations for the Series 2021A Bonds. In addition, with the inclusion of the estimated WIFIA Draw, all debt service obligations are met, including existing parity debt, GO bonds and the Series 2021A Bonds.

BURNS & McDONNELL QUALIFICATIONS Burns & McDonnell has specialized in providing engineering, operations, and financial consulting services to water, wastewater, electric, and gas utilities throughout our history of over 100 years. With over 7,000 employee-owners, consisting of specialists from all engineering disciplines and business functions, Burns & McDonnell offers a comprehensive package of experience and skills for performing rate and financial analyses, feasibility studies, and negotiation services. In addition, the firm has extensive experience in assisting utilities with the issuance of debt and with management and financial aspects of their operations.

Sincerely, BURNS & McDONNELL

David F. Naumann Project Manager, Business & Technology Services

Sara K. Stafford Senior Analyst, Business & Technology Services

DFN/SKS

F-23